Argentina's Duhalde - Working to lift bk limits

"This is the expectation and we are working for this ... but it's true that an accord with multilateral institutions is fundamental because ... it will help fortify the financial system," Duhalde said when asked to confirm weekend reports that Central Bank President Mario Blejer made a similar promise.

Argentina's much-hated banking restrictions were implemented Dec. 3 by Duhalde's predecessor President Fernando de la Rua to stop a year-long run on deposits during which $2 billion was yanked from the banking system in a single day. De la Rua resigned on Dec. 20 amid bloody riots and widespread social protests.

Argentina is currently negotiating with an International Monetary Fund mission that has been in Buenos Aires since last week. The country seeks to regain access to its $22 billion loan package as well as procure new funds. The IMF cut off Argentina's financial lifeline in December after the country's repeated failure to curb spending and meet agreed-upon fiscal targets.

Economy Minister Jorge Remes Lenicov, speaking from the 43rd annual meeting of the Inter-American Development Bank in Fortaleza, Brazil, said Monday the IMF has put Argentina in a political Catch 22 by denying funds until the government builds political support and reins in budgets of the spend-happy provinces. But, until IMF support is given, political accords can't be reached, Remes said.

Duhalde, in the brief press conference, reiterated his prediction that Argentina's four-year recession will end by July.

Duhalde's optimistic growth forecast, first stated last week, contradicts his administration's 2002 budget, which calls for the economy to contract by 5% in 2002. Wall Street economists, however, expect Argentina's economy to shrink by 10% this year.

Duhalde told reporters that those who believe his prediction are invited to come celebrate the recession's end with him in July. Nonbelievers, he said, will not be invited to the party.