No dollars needed: Chinese ICBC Argentina to facilitate settlements from pesos into yuan and yuan into pesos

The Argentine branch of the Industrial and Commercial Bank of China (ICBC) officially launched yesterday, Nov. 8, the “RMB Clearing Bank” service, through which the entity will provide correspondent banking operations in the Chinese currency, RMB, or yuan, to local financial institutions.

The initiative, announced within the framework of the tenth anniversary of the entity’s presence in the South American country, is authorized by the central banks of both countries and aims at facilitating foreign trade and investment settlements between China and Argentina.

The event took place in the Puerto Madero district, in the vicinity of ICBC Argentina’s headquarters, and was attended by the president of the Central Bank of the Argentine Republic (BCRA), Miguel Ángel Pesce.

“A bank is created that can transform pesos into yuan and yuan into pesos. The Central Bank of the Argentine Republic has favored this process (…), authorized the banks’ yuan accounts in the local market, and opened a wheel in the electronic open market for transactions in yuan,” said the official.

The head of Argentina’s monetary authority remarked that the process occurs between two “complementary” countries.

“We have to work together; Argentina needs to export more, it needs to develop its capital market, and there we have a strategic task to carry out with China, and ICBC plays a significant vital our country in that sense”, he emphasized.

The head of the BCRA highlighted Argentina’s commitment to the internationalization process of the yuan, recalling its support from the first moment in the International Monetary Fund in the incorporation of the Special Drawing Rights (SDR) basket of currencies.

“This is one more step, trying to make transactions between the two countries more efficient without going through a third currency,” he said.

Pesce was “very enthusiastic” about the process and said that “now ICBC has a new challenge, which is to collaborate so that exports from Argentina reach China so that Chinese capital reaches Argentina, and there is a better integration between both countries”.

For his part, China’s ambassador to Argentina, Zou Xiaoli, extended, through a recorded message, his congratulations for the tenth anniversary of ICBC Argentina and the launching ceremony of “RMB Clearing Bank” in the South American country.

“Over the past decade, China and Argentina have established and deepened the comprehensive strategic partnership,” said the diplomat, who valued that in that time, ICBC has been able to “seize opportunities for entrepreneurship, working closely with the Argentine government and enterprises.”

Zou said, “China and Argentina have signed five swap agreements, and the RMB has become an important currency that makes up Argentina’s reserves, providing strong support to maintain Argentina’s economic and financial stability”.

The Chinese ambassador said China is willing to work with Argentina to “tighten currency swap cooperation to encourage greater use of domestic currencies in trade and investment,” thus promoting further bilateral cooperation.

“I am confident that ICBC Argentina will continue working with the Argentine side to undertake new projects and open up new opportunities,” Zou added.

ICBC is a Chinese-owned bank with a presence in 49 countries and regions. It has been in Argentina for ten years, with 120 branches and 3,584 employees, serving one million households, more than 40,000 small and medium-sized businesses and companies, and close to 1,800 corporate clients.