Argentina to Pay for Chinese Imports in Yuan Instead of Dollars

Economy Minister Sergio Massa said on Wednesday that Argentina would pay for Chinese imports in yuan instead of US dollars to preserve its dwindling foreign reserves.

“The South American country will be able to program import volumes in yuan worth (equivalent) of more than $1 billion starting next month,” Massa said at a meeting in Buenos Aires with Chinese Ambassador Xu Xiaoli.

This would “replace” Argentina’s use of US dollar reserves.

Argentina’s government on Tuesday accused the country’s right-wing opposition of fueling the peso’s dramatic erosion against the dollar and ordered an investigation.

The peso was at 227 against the dollar on the official exchange rate on Tuesday, but more than doubled on the parallel “blue” market.

The decline began last week after several days of pressure on the peso in a period of pre-election uncertainty in a country with exchange controls to limit the impact of the financial crisis and inflation of more than 100 percent year-on-year. ,

Economist Maria Castiglioni told the TN broadcaster that the devaluation was partly the result of Argentina seeking “refuge” in the US dollar to protect its purchasing power.

Massa said the decision to pay in yuan “improves the perspective of Argentina’s net reserves.”

This “allows us to maintain the level of activity, the volume of imports, the momentum of trade between Argentina and China, and the level of economic functioning necessary for Argentina” after a poor year for domestic agriculture, and thus exports. , in the midst of persistent drought .

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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)