Argentina’s Economy Minister Sergio Massa has announced that from this month imports from China will be paid for in Chinese yuan. The deal, which will allow the country to protect its dwindling dollar reserves, includes spending more than $1 billion in April.
Argentina to settle bilateral trade with China in Chinese yuan
Argentina, one of Latin America’s three largest economies, uses the Chinese yuan to pay for certain imports. A statement by Argentina’s Economy Minister Sergio Massa said the country will start paying for Chinese imports using the Chinese yuan in the context of saving the country’s still scarce dollars.
of agreement As China deepens its penetration and use of the renminbi in Latin America, and as Argentina successfully leverages the $5 billion in “swap” reserves approved between Argentine President Alfredo Fernandez and the Chinese President, Ana We recognize that the list is a positive agreement for the nation. Xi Jinping, hardened At a bilateral meeting held at the 17th G20 Summit in 2022.
China is now Argentina’s international partner, and the move will ostensibly allow it to reduce the weight of its imports at a time when Argentina’s reserves are weakening. There are $1.07 billion in imports to be paid, and $800 million is already due in May to be paid in the same way.
Crisis and reaction in Argentina
Chinese concessions given to Argentina by Chinese President Xi Jinping have allowed the central bank to turn its attention to the devaluation and inflation spiral Argentina is currently experiencing, hitting a record low against the US dollar last week. resources can be devoted to stabilizing the statutory exchange rate.
Massa also said using the Chinese yuan would help disarm the corruption schemes that justify using Uruguay as a bridge to pay for Chinese imports in dollars. he said:
This swap of guarantees to continue production with intermediate goods from China avoids the triangulation that has been detected — this is against what Argentina imported rather than what it bought cheaply (by intermediaries). It was used in some way to make you pay more.
The measure received a mostly positive response from major small and medium enterprise (SME) associations. according to Argentinian news agency Teram. Leo Bilanski, president of his ENAC, one of those organizations, said there are some advantages to using the Chinese yuan to operate. he explained:
Being able to operate in both countries’ home currencies makes trade transparent, facilitates foreign trade operations for SMEs within the framework of dollar restrictions, and encourages financial speculation using illicit dollars.
What do you think of the shift to the Chinese Yuan that Argentina is carrying out to settle its bilateral trade with China? Let us know in the comments section below.
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