The Central Bank of the Argentine Republic (BCRA) granted the activation of the current currency swap agreement with the Bank of the People’s Republic of China (PBC) and the two entities committed to deepen the use of the RMB in the Argentine market for bilateral exchange.
“The swap includes the exchange of currencies as a reinforcement of international reserves for 130 billion renminbi yuan and a special activation for 35 billion renminbi yuan to offset foreign exchange market operations,” the Central Bank reported.
The announcement came this Sunday, January 8, after the meeting that the president of the BCRA, Miguel Pesce, held with the governor of the PBC, Yi Gangwithin the framework of the Bimonthly Meeting of Central Bank Governors organized by the Bank for International Settlements (BIS) in the city of Basel, Switzerland.
In addition, from the entity led by Pesce they assured that the homonymous institutions of Argentina and China “committed to deepen the use of the RMB in the Argentine market for bilateral exchange.”
Currently, the BCRA has access to 35 billion yuanwhich is equivalent to five thousand million dollars, to compensate the operations of the exchange market and the rest of the swap is kept destined to the reinforcement of international reserves.
The agreement was the subject of negotiation a long time ago, it had even been the subject of conversation in the last meetings
bilateral agreements that Alberto Fernández and Xi Jinping maintained during 2022.
With swap confirmation, companies that export to China will have the possibility to do so in yuan or dollars, which takes pressure off the outflow of foreign currency from the Central Bank.
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