ZCZC
BCN-07
ARGENTINA-CHINA-TRADE
China agrees $9 billion currency swap with Argentina
BUENOS AIRES, Dec 3, 2018 (BSS/AFP) – China and Argentina signed a $9
billion currency swap deal to boost the crisis-stricken South American
country’s foreign currency reserves, its central bank announced Sunday.
Struggling to recover after a currency crisis earlier this year, Latin
America’s third largest economy sought the help of the International Monetary
Fund — which approved a $56 billion loan package.
Now, this latest agreement will “contribute to greater financial stability
and also facilitate trade” between China and Argentina, according to the
bank’s statement.
A currency swap sees two parties agree to exchange a certain amount of
foreign currency at a pre-determined rate, protecting against fluctuations.
Argentina’s central bank will be able to draw on these funds in an
emergency.
The agreement followed the G20 summit in Buenos Aires, as Chinese President
Xi Jinping was received by his Argentine counterpart Mauricio Macri for a
state visit.
The two countries signed 30 trade and financial agreements in total.
“We are extending cooperation on economic, agricultural, financial and
infrastructure issues,” Xi told a press conference.
After Brazil, China is Argentina’s second largest trade partner.
In 2017, the relationship was firmly in Beijing’s favor: China exported $17
billion of goods to Argentina, while importing $8 billion of goods from that
country.
Beijing and Buenos Aires also agreed another currency swap in 2014, which
provided $11 billion for Argentina’s depleted treasury reserves.
BSS/AFP/HR/0935