Argentine senators will reject the appointment of Mercedes Marco del Pont as chief of the central bank when they hold their next full session on March 11, said opposition Senator Samuel Cabanchik.

"We are going to have enough votes on the floor to reject the appointment," Cabanchik, of the Civic Coalition party, said in a telephone interview last night after a senate committee voted against Marco del Pont's nomination. "All the opposition blocs are in agreement."

Opposition lawmakers, who control both houses of congress, have challenged the central bank's March 1 transfer of $6.6 billion to the Treasury immediately after President Cristina Fernandez de Kirchner announced two decrees ordering the use of reserves to pay debt. An earlier edict, which also ordered the payment of debt with bank funds, was halted by a federal court in January.

Marco del Pont, who Fernandez named on Feb. 3, didn't appear before the committee last night after being summoned to explain her decision to move the reserves before lawmakers had a chance to debate the presidential edicts. In a letter to the senate, which was read aloud by Senator Adolfo Rodriguez Saa, she requested a new date for the hearing.

In a pre-recorded interview broadcast by Todo Noticias television channel last night, Marco del Pont said the transfer of funds was "legitimate" and "obeyed a presidential decree."

According to the bank's charter, the president and the board of directors are named by the country's president with the agreement of the senate.

Eoin Treacy's view The measures currently being put in place are aimed primarily at regaining access to the international credit markets for Argentina. Opposition to tampering with the country's reserves, which have grown considerably in the last decade, was inevitable given the country's record on economic governance. (Also see Comment of the Day on January 13th).

The Argentine CDS spread has been ranging in the region of 1000 basis points for much of the last six months and contracted somewhat as the President indicated she would push ahead with the use of reserves to pay back debt; even though it makes her political position more tenuous.

Questionable political governance remains an obstacle to Argentina achieving its long-term economic potential. A coherent policy for reform and development will have to be found that both sides of the political divide can agree to so that policy is not chopped and changed with every new government. Such an achievement would be a promising signal for the country's future.

The Argentine Peso appears to be bottoming out. The US Dollar failed to sustain last week's upside break and its overall uptrend has lost momentum since August. A sustained move below ARS3.8 would complete the medium-term top.

The Merval Index remains one of only a handful of stock markets to have regained its pre-crisis highs. It continues to consolidate below 2400 in a relatively steady mean reversion. A sustained move below 2000 would be required to indicate anything other than a medium-term pause in the overall impressive uptrend.