Argentina renews US$19-billion China swap for another five years

Argentina has secured another five-year extension for its roughly US$19-billion currency swap agreement with the People’s Bank of China, which will continue until 2027. The swap line, which was initially signed in 2009, has been a key source of reserves for Argentina leading up to the 2027 presidential election. The Central Bank of Argentina renewed the deal along with the portion that has been active since 2023, amounting to about US$5 billion.

The renewed agreement strengthens the close cooperation between the two institutions, according to the Central Bank Governor Santiago Bausili. A meeting between Bausili and the PBOC Governor Pan Gongsheng took place during a June symposium in Shanghai, where discussions about extending the swap under the same conditions were ongoing.

Milei's predecessor utilized a portion of the swap line in 2023 to make payments to the International Monetary Fund and finance imports. Despite geopolitical tensions between the United States and China, the swap line renewal remains stable. Milei's administration has largely paid down the US$5 billion active portion, leaving only about US$680 million remaining.

The US Treasury Secretary and Milei's predecessor expressed differing views on the swap's future, but the economic reforms of Milei's government are expected to provide sufficient foreign exchange inflows to cover the active portion of the swap.