June 05, 2023 (MLN): Argentina and China have signed an agreement to extend its currency swap line and double the amount to nearly $10 billion, the South American country's central bank said in a statement on Friday, a boost to its sinking foreign currency reserves, as Reuters reported.
The bank said that both countries have agreed to renew the swap line for more than three years, it comprises a total of 130bn Yuan or 18.4bn in U.S. dollar terms.
The freely accessible part will also be doubled to 70bn yuan ($9.9bn).
Argentina's central bank stated that the procedure has begun to increase the usable amount by another 35bn yuan.
It further added, "This increase will come into effect once the first tranche of the extension used for commercial exchange between the two countries is exhausted and with the agreement of the parties."
The country’s main source of dollar revenue is grains, as their production was adversely impacted by historic droughts exports have fallen sharply, resulting in a reduction in Foreign exchange reserves.
Argentina's Ministry of Economy said that the swap would be in a single tranche and would look forward to promoting more Yuan spots and future transactions.
Argentina’s government is focusing on increasing FX reserves to cover the import costs and make necessary debt payments.
Further, to meet economic targets under a $44 billion loan program with the International Monetary Fund (IMF), as Reuters added.
