BUENOS AIRES (Reuters) – Argentina and China have formalized the expansion of a currency swap deal, allowing the South American country to extend its depleted foreign currency reserves, the Argentine central bank said on Sunday.
Argentina’s government must rebuild reserves to cover trade costs and future debt repayments, and more reserves are a key objective of a serious debt cope with the International Monetary Fund (IMF).
President Alberto Fernandez announced the deal in November last yr and said on the time it was value $5 billion.
The heads of the Argentine and Chinese central banks “confirmed that the deal for the swap of currencies between each institutions has been activated and committed to deepening using (Chinese yuan) within the Argentine market,” the central bank said in a press release.
China is Argentina’s second biggest trade partner, after Brazil, and the second most vital destination for Argentine exports.
“The swap comprises the exchange of currency for reinforcement of international reserves of 130 billion yuan and a special activation of 35 billion yuan to compensate operations on the foreign exchange market,” the statement said.
(Reporting by Jorge Otaola; Writing by Maximilian Heath and Julia Symmes Cobb; Editing by Daniel Wallis)
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