By Taos Turner
BUENOS AIRES–Argentine President Cristina Kirchner pledged Tuesday to make an upcoming $2.2 billion Boden 2012 bond payment in U.S. dollars, rejecting recent speculation that the government would try to pay some or all of its foreign-currency-denominated debt in Argentine pesos.
In early August, the government faces a $2.2 billion payment on the Boden 2012 dollar-denominated bond.
“We’re going to pay in dollars as should be done,” Mrs. Kirchner said in a nationally televised speech.
Mrs. Kirchner recently submitted a bill to Congress that would allow debtors to pay U.S.-dollar-denominated contracts in pesos.
The bill is part of a government push to wean Argentines off their long-held preference to use dollars for major transactions.
The bill, as currently written, would allow debtors to “free themselves” from the dollar-payment requirement by paying “the equivalent amount” in pesos.
Bond prices have taken a beating amid speculation that the government would attempt to shirk its foreign-currency commitments.
The Boden 2012, however, has performed well in trading recently because investors have bought the bond solely to sell it overseas immediately afterward in a bid to acquire dollars.
The government, which is scrambling to obtain dollars to make debt payments, has severely cracked down on the local foreign-exchange market, making it virtually impossible for Argentines to buy dollars.