Argentina’s Central Bank renews currency swap with China
The announcement stated that the agreement was extended from three to five years, in order to provide ‘greater predictability’ La entrada Argentina’s Central Bank renews currency swap with China se publicó primero en Buenos Aires Herald .
The People's Bank of China (PBoC) and the Central Bank of Argentina (BCRA) have renewed their bilateral currency swap agreement, extending the maturity from three to five years. This swap, initially valued at RMB130 billion (approximately US$13 billion), includes a RMB35 billion tranche (about US$5 billion) that has been activated since early 2023 and will remain in effect.
The BCRA explains that the longer term aims to provide "greater predictability regarding the continuity of this instrument." Both central banks view the renewed agreement as reinforcing their close cooperation, which has existed for 17 years since the initial swap. The swap operates through two modalities: onshore accounts, where funds stay within China, and offshore, which converts yuan into U.S. dollars for use in international transactions.
Argentina can access yuan to pay for imports without tapping its U.S. dollar reserves, while the BCRA provides pesos and later reverses the transaction, including any interest. The BCRA's head, Santiago Bausili, highlights that the activated portion of the swap can be utilized without further approvals, serving as crucial liquidity management for the central bank.
The debate over the swap's future arises as Argentina prepares to discuss reforms of the BCRA's charter in August.
Written by urgent.news from Buenos Aires Herald's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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