Argentina renews US$5 billion currency swap with China for 12 months

Argentina’s Central Bank has renewed a US$5 billion portion of the currency swap it has with its Chinese counterpart for a year, which it was supposed to start paying back in June. The funds will continue to be available to the Argentine monetary authority “until mid-2026”, according to an official communiqué released on Thursday. This is the second time in two years that both central banks renewed the currency swap.

The first swap line between both countries, which acts as a loan from the Chinese central bank that its Argentine counterpart can activate, was signed in 2009. Over the years, this was extended to 130 billion yuan, some US$17.7 million — more than 70% of Argentina’s gross international reserves.



In 2023, then-President Alberto Fernández’s administration “activated” a US$5 billion tranche, which started to mature last year. In June 2024, Argentina and China postponed the payments to 2025, and on Thursday, they renewed the currency swap again.Earlier this week, Argentina reached a staff-level agreement for a US$20 billion program with the International Monetary Fund (IMF).

The deal has yet to be discussed and approved by the lender’s board of directors, something that the IMF said would happen “in the coming days.” Local media are speculating it could happen as soon as Friday.Additionally, US Treasury Secretary Scott Bessent will travel to Buenos Aires on April 14 to meet with President Javier Milei and other government officials and business leaders after Washington declared “full support” for Argentina’s economic reforms.

The Central Bank communiqué said the Chinese funds would be used to “reduce risks in [the monetary authority’s] transition to a consistent and sustainable monetary and exchange rate regime, in a challenging international context for external capital flows.”The market assumes the new IMF deal will come with a new monetary and exchange rate scheme.U.

S.-China tensions escalateThe swap renewal also came at a time when the United States government launched a full-blown trade war against China, imposing a base 125% tariff on its products. Argentina also has a tumultuous relationship with the Asian country, with Milei calling the government “communist assassins.

” During his electoral campaign, Milei even said he would sever ties with China, something that has so far not come to fruition.Last week, Donald Trump’s special envoy for Latin America, Mauricio Claver-Carone, said that the U.S.

wanted Argentina to end its currency swap with China. “A topic that does worry us in Argentina is still, obviously, the role of China and the Chinese, a problem that President Milei inherited,” Claver-Carone said during a conference on the United States’s strategy on Latin America at Miami Dade College.“I’m not going to meddle in the middle of the negotiations that [Argentina] is carrying out with the IMF because we want them to be successful, but what we do eventually want is for the famous credit line Argentina has with China to come to an end.

”After Claver-Carone’s comments, Foreign Ministry Spokesperson Lin Jian posted on X that “China’s currency swap with Argentina contributes to Argentina’s economic and financial stability and is welcomed by the Argentine government.” “We call on the U.S.

to get its perspective right and start thinking about what it can do to benefit the development of Latin American and Caribbean countries,” Jian added.La entrada Argentina renews US$5 billion currency swap with China for 12 months se publicó primero en Buenos Aires Herald..