Former head of the Central Bank (BCRA) Alejandro Vanoli. Photo via Diario Chaco

Former Central Bank (BCRA) head Alejandro Vanoli testified in court today regarding the investigation on the sale of future dollar contracts in September and December of last year. Vanoli presented a written statement to the court:

“The BCRA operated with future dollar contracts to send clear and compelling signals that [the government] was not planning on validating the expectations of devaluation in order to promote stability in the foreign exchange,” reads the statement.

If you’re asking yourself, “future dollar what?” Well, “future dollars” commit the BCRA to sell dollars at a fixed rate in Argentine pesos at some date in the future, at an artificially low rate to unknown buyers. Basically, US $10 billion worth of future dollar contracts were sold, when those futures were actually worth US $15 billion. Allegedly, given his knowledge of President Mauricio Macri’s explicit intention to devalue the Argentine peso from US $10 to US $15, Vanoli effectively gave away US $5 billion to the original buyers of the futures contracts in question.

According to Vanoli’s statement, however, no fraudulent activity was involved:

“The transactions occured at market price and acted in accordance with [the National Budget Law] that was approved by Congress [and] the payments were made in pesos, meaning that the [BCRA’s] dollar reserves were not compromised.”

Furthermore, Vanoli denied that the actions had implied a “time bomb” for Macri’s then incoming administration, blaming the current BCRA head Federico Sturzenegger for the unfavorable results.

“[We] tried to avoid a devaluation because this would have generated a higher level of inflation, deteriorating workers’ salaries and the people’s welfare, as was clearly demonstrated after December 17th 2015,” the statement continued.

Here, Vanoli was alluding to the current government lifting foreign exchange restrictions collectively known as the “cepo” that effectively devalued the peso because its value in dollars jumped from an artificial US $10 to US $14 at the time.

Federal Judge Claudio Bonadío has also summoned 12 others to testify, including former President Cristina Fernández de Kirchner and former Economy Minister Axel Kicillof. Cristina will testify on April 13th and there is a march scheduled to show her support.