The Argentine central bank has announced the expansion of a currency exchange deal with China, allowing Argentina to replenish its depleted foreign currency reserves.
Rebuilding reserves to meet trade costs and future debt obligations is a fundamental objective of a significant debt agreement between Argentina and the International Monetary Fund (IMF).
In November of last year, President Alberto Fernandez announced the agreement and stated at the time that it was worth $5 billion.
The leaders of the Argentine and Chinese central banks “confirmed that the deal for the swap of currencies between both institutions has been activated and committed to deepening the use of (Chinese yuan) in the Argentine market,” according to a statement from the Argentine central bank.
After Brazil, China is Argentina’s second largest trading partner and second most important export destination.
“The swap comprises the exchange of currency for reinforcement of international reserves of 130 billion yuan and a special activation of 35 billion yuan to compensate operations on the foreign exchange market,” the statement said.