Cash-hungry Argentines protest against banking freeze

Argentines took to the streets banging pots and pans in a noisy outpouring of discontent, demonstrating against a month-old banking freeze limiting cash withdrawals.

The spontaneous outburst last night marked the second such display of anger by Argentina’s struggling middle class since a similar protest a week ago helped topple the presidency of Fernando de la Rua.

It came hours after Argentines flooded banks, forming long lines and shouting for their money after the government eased a five-day banking holiday that had shut off most routine financial transactions.

‘‘End the freeze!’’ many of the protesters shouted last night, calling for an end to bank withdrawal restrictions. Many beat pans on balconies and entered the streets with children in tow.

One demonstrator, Maria Luisa Lerer, 64, said anger over the banking restrictions and a failed attempt to overturn them in the courts stoked the protest. Some 1,000 people gathered outside the government palace and on street corners in rejection of government economic policies.

‘‘We want our money. They are robbing the people,’’ said Lerer. ‘‘This is unjust!’’

A deep-rooted economic crisis is fuelling rising tension among depositors as a days-old government maintains a freeze imposed December 1 limiting bank cash withdrawals to £700 a month.

Hoping to ease social tensions that saw 26 people killed in riots last week, the government is also preparing to put out a third currency that is leaving many Argentines sceptical.

Interim President Adolfo Rodriguez Saa moved to finalize a congressional bill authorizing the creation of the ‘‘argentino’’ - a new money he says will breathe new life into an economy suffocating under four years of recession.

Scheduled to debut on January 15, the argentino will circulate alongside the peso and dollar as Argentina looks to print money as a way out of a cash crunch brought on by a prolonged economic crisis.

But many Argentines fear the value of the free-floating currency, backed by little more than a pledge of state support, will quickly depreciate.

For nearly a decade, the peso has been firmly pegged one-to-one with the dollar, but as the crisis has deepened its value too has begun to fall at some exchange houses.

With reserves shrinking, Rodriguez Saa has signalled that he will not be able to back the argentino with the country’s dollar supply, which for years has held up the value of the peso. The argentino’s worth will be determined on the street.

Argentina’s financial straits have already given rise to several different currencies, including government bonds issued by many of the country’s provinces, now especially hard up for cash. In some parts of Argentina’s interior, at least five different currencies circulate.

Long lines formed at many banks earlier yesterday as Argentines sought to withdraw the equivalent of £175 a week allowed under a current partial banking freeze.