Argentina paid creditors a total of 2.25 billion dollars on government-issued debt Monday, as it sought to shed the last vestiges of its 2001 default and return to the financial mainstream. Economy Minister Amado Boudou said the payment, or coupon, had been made to holders of dollar-denominated Boden 2012 bonds—meeting a debt obligation that aims to boost confidence.
Argentina has been excluded from (global capital) markets since December 2001, when the country suffered an economic collapse wiping out personal savings, shredding government finances and prompting Buenos Aires to default on its debt.
In 2005 Argentina restructured its defaulted debt but there are still an estimated 20 billion dollars in holdouts plus a pending debt to the Paris Club of lenders of 6.5 billion. The country’s debt currently stands at 145 billion US dollars
, plus the standing demands.
The Boden 2012 bond was issued in 2002 to compensate creditors who found access to their capital blocked during the 2001 freeze on bank withdrawals. It is estimated 65% of the bond issue is held outside Argentina and 35% locally.
Economists and private consultants saw Monday's move as ruling out the possibility that Argentina would delay debt repayments as it struggles against slumping growth and tax revenues.
Boudou defended the government's decision of using part of Argentina’s international reserves for the repayment operation arguing that "it will have a neutral impact on the Central Bank reserves."
“The funds we paid out are dollars bought by the Argentine Central Bank with money obtained through fiscal surplus hence we are not putting the federal currency reserves under risk". He added that the Central Bank currently has 46 billion on its reserves “which triple what the Central Bank used to have in 2003 before the Kirchners took power."