Argentina’s Fernandez Appears on TV to End Criticism of Absence

Argentine President Cristina Fernandez de Kirchner made her first public appearance since Dec. 19 to quash criticism of an absence during which reserves fell to a seven-year low and the peso weakened to a record on the black market.

In a televised speech from the presidential palace, Fernandez yesterday announced a 600-peso ($87) monthly stipend for students and mocked criticism of her silence over the Christmas period. Fernandez underwent surgery in October to remove a blood clot from near her brain. She departed on holiday to her house in southern Argentina Dec. 20 and returned to the capital Jan. 8.

“I hope nobody criticizes this national address after so much clamor for my presence,” Fernandez said, flanked by images of former first lady Eva Peron. “They wanted to create the sensation that I couldn’t carry on.”

During her absence from public view, the extra yield over U.S. Treasuries investors demand to hold Argentine bonds rose by as much as 1.19 percentage points and international reserves fell 4 percent. Some residents of Buenos Aires went more than a week without electricity in the middle of a heatwave as the national power grid couldn’t keep up with demand.

Central bank reserves have been tumbling an average of $1.3 billion per month over the past year as Fernandez uses the funds to pay foreign creditors and finance spending. The government said in September it will tap a record $9.86 billion of reserves to make foreign debt payments in 2014.

As the peso falls in the illegal street market to 12.15 pesos per dollar, the government has allowed the official exchange rate to depreciate to 6.9641 pesos per dollar in a bid to make exports more competitive and close a record gap of 70 percent between the two rates.

This week, Argentina announced restrictions on Internet purchases of foreign goods, adding to currency controls introduced by Fernandez since her 2011 re-election.

Before it's here, it's on the Bloomberg Terminal.