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President orders banks to lend US$3.3b

l BUENOS AIRES

Facing clear signs of a looming recession, Argentina's president is ordering the country's biggest banks to lend US$3.3 billion of their clients' savings at rates below what many believe to be the inflation rate.

The requirements which took effect yesterday limit interest on the loans to 15 per cent a year. The government says inflation is below ten per cent, but many analysts estimate it at around 25 per cent.

President Cristina Fernandez says the government saved the private banks when they were in trouble, and now it's the banks turn to do their part to fan Argentina's decelerating economy by lending five per cent of their deposits to small and medium-sized businesses.

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