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The central banks of Argentina and China have extended their bilateral currency swap agreement, valued at 130 billion yuan ($19.2 billion / 27.4 trillion KRW), for another five years.
The Central Bank of Argentina announced in a statement on the 5th, local time, that it had renewed the existing currency swap agreement with China, extending the maturity from three to five years.
This marks the longest contract period in 17 years since the first agreement was signed in 2009.
The two sides also agreed to maintain the 35 billion yuan (approx. 7.37 trillion KRW) active tranche, which has been in operation since early 2023 to support financial stability and bilateral trade.
These funds serve as foreign exchange liquidity assets that can be used immediately when needed without separate approval.
The renewal came just one day before the expiration of the existing agreement on August 6.
Santiago Bausili, Governor of the Central Bank of Argentina, previously stated, "As in previous years, we are consulting with the Chinese side for an extension and have no plans to abolish it."
The currency swap with China was first concluded in 2009 during the global financial crisis.
Through multiple renewals and increases since then, it has expanded to its current scale of $19.2 billion.
The former government of Alberto Fernandez utilized the activated swap funds to settle payments for Chinese imports and repay debts to international organizations in order to cope with a shortage of foreign exchange.
As repayments continued subsequently, the remaining balance dropped to around $679 million (approx. 965.6 billion KRW) as of January this year.
During the 2023 presidential campaign, Argentine President Javier Milei defined China as a communist country, claimed he would not deal with the Chinese government, and refused to join BRICS (an economic bloc comprising Brazil, Russia, India, China, and South Africa).
In addition, he has strongly criticized socialism and communism since taking office, recently continuing diplomatic tensions between the two countries by condemning Brazilian President Luiz Inacio Lula da Silva as "socialist trash," a "thief," and a "corrupt communist."
However, this is seen as a pragmatic choice to maintain the currency swap with China for the expansion of foreign exchange reserves and the stabilization of financial markets.
(Photo: Getty Images)
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