In a speech made last night at the Stock Exchange’s 158th anniversary, President Cristina Fernández de Kirchner announced that the US$2.2bn of the Boden 2012 debt will be paid today. She also stated that the government will use the Central Bank foreign exchange reserves to do so.
The payment will lower Argentina’s foreign debt in US dollars from 9.6% to 8.4% of the GDP and is seen by some as an end to the “corralito” policy, implemented in 2001. Some see yesterday’s announcement of debt repayment as a celebration. However, President Fernández insisted that “[she doesn’t] think this is a reason to celebrate, but to reflect”.
The Boden 2012 was the official government’s title to a collection of bonds held by investors. It was given out after the 2001-2 financial crisis caused Argentina to default on nearly US$100bn of foreign debt. Since 2002, the state has already spent US$19.6bn paying off the bond’s debt. President Fernández informed that 22% of these bonds are held by Argentines, whilst the remaining 78% are held by foreign investors.
During the same speech, the president announced an increase in pensions of 11.42% starting in September, with which the minimum amount, received by 5.9 million people, will be $1,880 per month. From this, 73% of retirees will receive an automatic monthly increase of $192. The readjustment is the second of two annual increases that were already approved through the Mobility Law created in 2008. Since this law was passed, pensions have risen by 172%.
President Fernández also announced that the government will be able to increase the pensions for veterans of the Malvinas/Falklands War by 11.42%.