Argentina is in talks to renew and potentially expand its currency swap line with China, a central bank source said on Wednesday, as the South American country battles tumbling foreign reserves that threaten its ability to meet payments.
The country has free access to some $5 billion as part of the China currency swap agreement that totals 130 billion yuan ($18.81 billion). The two countries activated the usable portion in January to help bolster Argentina’s embattled peso.
The government source said the central bank was “advancing towards the renewal of the swap and discussing the possibility of increasing the unrestricted amount”, with the aim to have an agreement ready to sign by the end of May.
“The idea is to have everything sealed to travel and sign at the end of the month,” the source added. Economy Minister Sergio Massa and central bank chief Miguel Pesce are expected to travel to China from May 29 to June 4.
An economy ministry source, asked about the swap deal, said there could be news around the trip but gave no details.
Argentina must rebuild its reserves to cover trade costs and future debt repayments, as well as to meet economic targets under its $44 billion loan program with the International Monetary Fund (IMF), which it is currently trying to revamp.
China has been touting international usage of the yuan currency as a rival to the U.S. dollar, gaining a foothold in South America where it is the largest trade partner for many regional economies.
In April Argentina said it would start to pay for Chinese imports in yuan rather than dollars, a measure also aimed at relieving the country’s dwindling dollar reserves.
Argentina’s foreign currency reserves have fallen sharply this year as a major drought battered exports of cash crops corn and soy and the peso weakened, pressured by 109% annual inflation and political uncertainty ahead of elections in October.
($1 = 6.9121 Chinese yuan renminbi)
Source: https://www.investing.com/news/economy/argentina-in-talks-to-expand-china-currency-swap-line-source-says-3090063
The White House on Thursday said Nippon Steel Corp’s $14.9 billion proposed acquisition of U.S. Steel Corp deserves “serious scrutiny,” given the company’s core role in U.S. steel production that is critical to national security. In its first substantive statement on the deal, the White House said it viewed a strong domestic steel industry as […]
The angular, polarizing design of the Cybertruck will help boost the Tesla (NASDAQ:TSLA) brand, the electric vehicle maker’s chief designer said on Thursday, adding that the pickup was no experiment. “Love it or hate it, it’s a conversation starter, and it gets people talking about the brand,” Tesla Chief Designer Franz von Holzhausen said at […]
Boeing (NYSE:BA)’s first direct delivery of a 787 Dreamliner to China since 2019 is set to land in Shanghai on Friday, a step that could hasten the end of China’s freeze on deliveries of the firm’s profitable 737 MAX after more than four years. Privately owned Chinese carrier Juneyao Airlines on Thursday took delivery of […]
