Argentina ? Argentina will pay off its debt to the International Monetary Fund by year’s end, President Nestor Kirchner announced Thursday, saying the country is better off taking a financial hit now than submitting to more IMF prescriptions for economic policy.

Argentina will raid its foreign currency reserves of $9.8 billion to settle the debt, a risky maneuver for a country that relies on reserves to help control the value of its peso currency. But the move will save the government about $1 billion in interest costs over the next two years, Kirchner said. And the symbolism of the decision will reap for Kirchner significant political dividends.

Kirchner and the IMF have been battling since 2003 over just about every aspect of the fund’s relationship with Argentina.

Unwilling to abide by several conditions the IMF insisted on to release new loans or refinance the old ones, Kirchner instead kept making most of Argentina’s payments even as the country struggled to climb out of a crisis that had thrown millions into poverty.

In the process, Kirchner became something of a hero among many Latin Americans. And the IMF’s reputation sank further in the region. Earlier this week, to cheers of his fellow Brazilians, President Luiz Inacio Lula da Silva said Brazil would also settle up early with the IMF.