Argentina, China expand currency swap deal – Media – RT Business News
The countries agreed to expand the use of the yuan in the Argentine market for bilateral trade
China and Argentina have formalized the expansion of a currency swap deal, Reuters reported on Sunday, citing Argentina’s Central Bank. The move should boost the South American country’s depleted foreign exchange reserves.
China is currently Argentina’s second largest trading partner after Brazil and Argentina’s second largest export.
The currency swap agreement allows Argentine companies exporting to China to settle in yuan or dollars, facilitating the outflow of foreign currency from the central bank.
Argentine Central Bank Governor Miguel Pesce and his Chinese counterpart Yi Gan “confirmed the launch of the currency swap agreement between the two institutions and committed to deepen the use of (Chinese yuan) in the Argentine market”, said in the statement of the news agency.
The heads of the monetary regulators of Argentina and China met in Basel, Switzerland at the bimonthly meeting of central bank governors organized by the Bank for International Settlements (BIS).
According to the document, the procedure “This includes foreign exchange to strengthen international reserves by 130 billion yuan and a special activation of 35 billion yuan to offset foreign exchange market operations.”
The agreement was announced in November after months of negotiations. At that time, the president of Argentina, Alberto Fernandez, said that he was worth 5 billion dollars.
Argentina’s government needs to rebuild reserves to cover trade losses and future debt, as boosting reserves is one of the main goals of its major debt deal with the International Monetary Fund (IMF).
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