China agrees $9 billion currency swap with Argentina

Share

Tweet

Share

Share

Email

Comments

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 USD 56 billion loan package.

China and Argentina signed a USD 9 billion currency swap deal to boost the crisis-stricken South American country’s foreign currency reserves, its central bank announced.

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 USD 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.

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 USD 17 billion of goods to Argentina, while importing USD 8 billion of goods from that country.