This year Argentina paid off more than $11 billion worth of debt using foreign currency reserves, which the government boosted by limiting dollar purchases to reduce capital flight and restricting imports to ensure a trade surplus. The dollar clamp has had a domestic political cost for President Cristina Kirchner among middle class Argentines, while the import restrictions have raised international tensions.

'Economic Sovereignty' Costs Argentina’s Kirchner at Home and Abroad

By , , Briefing

BUENOS AIRES, Argentina -- On Wednesday evening, hours before she flew to Havana to symbolically visit regional ally Hugo Chávez, Argentine President Cristina Kirchner was in Mar del Plata, Buenos Aires province, to celebrate the return of the naval ship Libertad. The ship had been impounded in Ghana at the request of NML Capital -- an unpaid creditor from Argentina’s $100 billion default in 2002.

The frigate’s homecoming, facilitated by an international maritime court ruling, was a victory for Kirchner’s self-proclaimed “national and popular” project. Her government refuses to pay so-called vulture funds such as NML, which bought up debt at a vastly reduced rate when Argentina was on the edge of collapse, and has appealed against a recent order by an American judge to do so. ...

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