Argentina renews US$19 billion China currency swap, brushing off Washington’s pressure

Argentina has extended its currency swap agreement with China for an additional five years, preserving a US$19 billion lifeline that President Javier Milei's administration has been under pressure from Washington to abandon. The agreement, signed by the Argentine central bank and the People's Bank of China, extends the US$130 billion line until 2031, two years longer than any previous renewal.

This extension comes as Milei, seen as a close ally of US President Donald Trump, came under scrutiny for his vow to stop doing business with communists, including China. The renewed swap provides greater predictability for Argentina's financial stability, according to the central bank. The swap has long been a crucial source of funding for Argentina, accounting for about 40 percent of the country's foreign reserves.

However, since 2023, only a US$5 billion tranche has been activated, used to pay off international debts and defend the peso. Despite pressure from the United States, Argentina has continued to rely on the swap, with its officials describing the relationship with China as "stable and quasi-permanent."