Currency Swap: Argentina to beef up depleted reserves with Chinese yuan, constituting a threat to Dollar dominance.

Americas WORLD NEWS

Currency Swap: Argentina to beef up depleted reserves with Chinese yuan, constituting a threat to Dollar dominance.

January 9, 2023January 9, 2023

The South American nation can now augment its depleted foreign currency reserves thanks to the formalization of an expansion of a currency swap agreement between Argentina and China, the Argentine central bank announced on Sunday.

The government of Argentina must increase reserves in order to pay for trade expenses and upcoming debt obligations. Increasing reserves is a main goal of a significant debt agreement with the International Monetary Fund (IMF).

In November of last year, President Alberto Fernandez announced the deal and stated that it was valued at $5 billion.

The central bank stated in a statement that the leaders of the Argentine and Chinese central banks “confirmed that the arrangement for the swap of currencies between both institutions has been activated and committed to extending the use of (Chinese yuan) in the Argentine market.”

China is Argentina’s second-largest trading partner after Brazil and the country ranks second in terms of export importance.

The swap includes an exchange of currency for an additional 130 billion yuan in international reserves as well as a special activation of 35 billion yuan to cover transactions on the foreign exchange market, according to the announcement.

20k

60k

100k

500k

600k