Argentina’s Central Bank highlights relevance of yuan payment for imports from China

The president of the Central Bank of Argentina (BCRA), Miguel Pesce, affirmed today, Wednesday, that the recent agreement for the payment in yuan of imports of goods originating in China would contribute to concrete objectives of the local economy.

“The yuan payment system contributes to more comprehensive objectives, such as the prudent management of international reserves, as well as facilitating domestic production, employment, and exports, and preserving Argentina’s growth and financial stability conditions”, said the president of the monetary entity during a virtual meeting in which this operation was announced.

Pesce explained that imports might be made in Chinese currency “in compliance with the Central Bank’s exchange regulations” without resorting to the US dollar in exchange operations.

The head of the monetary authority also recalled that the International Monetary Fund (IMF) incorporated the yuan into the currency basket in 2016, pointing out that bilateral trade in local currencies “is one more step in the yuan’s internationalization policy.”

“The Central Bank of the Argentine Republic adhered early to this global trend with the first currency swap signed with the People’s Bank of China and with decisions such as the recognition of ICBC as a yuan clearing house,” he said.

Among the speakers at the meeting were representatives of the Operations and Foreign Exchange team of the Central Bank, members of the General Directorate of Customs as well as officials from the People’s Bank of China and the ICBC bank, the BCRA said in a press release.

In the virtual meeting, it was explained that the payment of imports through renminbi (RMB) “facilitates trade since the Central Bank sells yuan to the entities (banks) that request it, and the operations are canceled in Argentine pesos, without the intervention of other currencies”.

The Argentine Government announced last April 26 that imports of intermediate goods from China would be paid in yuan between April and May, using the “swap” agreement between both countries.

According to the Executive, the measure seeks to maintain the economic activity of the country while protecting international reserves.

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