Argentina to pay for Chinese imports in Yuan, not dollar
Argentina's Economy minister Sergio Massa at the Economy Ministry in Buenos Aires, Argentina on August 3, 2022. (Reuters)
Argentina will begin paying for Chinese imports in yuan rather than US dollars, according to Economy Minister Sergio Massa, in an effort to protect the country's decreasing foreign currency reserves.
After a meeting with Chinese Ambassador Zou Xiaoli, Massa asserted that "Argentina must keep its foreign reserves robust" after the worst drought in history.
He indicated that there will be hurdles "to rethink and redefine the country's import strategy" in collaboration with the International Monetary Fund (IMF).
"Argentina has a currency swap with China that works not only as an instrument to strengthen its (international) reserves but also as a financial and commercial instrument,” he stated.
Argentina plans to pay for almost $1 billion in Chinese imports in yuan rather than dollars in April, and approximately $790 million in monthly imports will be paid in yuan thereafter, according to a government statement.
Argentinian daily Perfil explained that the Chinese ambassador spoke on Wednesday, emphasizing the growing collaboration between Beijing and Buenos Aires, as well as President Alberto Fernandez's visit to China.
"All of this was reflected through the official visit of Alberto Fernandez to China and a series of documents that emphasize bilateral relations," he stated.
Xiaoli added that "China continues to support Argentina in defending the sovereignty of its economy, which is why we are working on the swap so that companies can use the yuan to reduce costs. We have been working hard and very closely to exchange information and data."
In recent months, there has been discussion in the area about shifting away from reliance on the US dollar.
While on an official visit to China to strengthen ties in April, Brazil's President Luiz Inacio Lula Da Silva expressed his intention to shift away from reliance on the US dollar in international commerce, and Argentina and Brazil proposed the idea of forming a regional currency in January.
Lula stated at the time that the goal would be to strengthen economic and financial ties between Latin American states.