Argentina and China have formalized the expansion of a currency swap agreement. According to the central bank “Banco Central de la República Argentina” (BCRA), this allows the South American country to increase its depleted foreign exchange reserves.
Argentina’s government needs to replenish its reserves to cover trade costs and future debt repayments, and more reserves are a key goal of a major debt deal with the International Monetary Fund (IMF). President Alberto Fernandez announced the deal last November, citing a value of US$5 billion at the time.
The heads of Argentina’s and China’s central banks “confirmed that the currency exchange agreement between both institutions had been activated and committed to deepening the use of the Chinese yuan in Argentina’s market,” the central bank said in a statement.
“The swap includes ¥130 billion foreign exchange to strengthen international reserves and a special activation of ¥35 billion to offset operations in the foreign exchange market,” the statement said (1 renminbi yuan equals US$0.15).
With information from latinapress