Argentina received 1.3 billion USD by currency swap
During the last three weeks the Central Bank of Argentina received 1.3 billion USD by currency swap with China. This happens after the South American country became insolvent, and access to international financial markets had been revoked. The data of the Central Bank of Argentina show that on Monday (17th November) its reserves amounted to […]
During the last three weeks the Central Bank of Argentina received 1.3 billion USD by currency swap with China. This happens after the South American country became insolvent, and access to international financial markets had been revoked. The data of the Central Bank of Argentina show that on Monday (17th November) its reserves amounted to 28.785 billion USD from 28.279 billion USD reported on Friday (14th November). However, the amount is below the required coverage of imports for five months.
The currency swaps are part of the loan for 11 billion USD, signed by the President of Argentina Cristina Kirchner and Chinese president Xi Jinping in July this year – shortly before the country announced that it can not perform its debt obligations.
Under the credit agreement Argentina could use the funds to provide support for their reserves or pay with CNY to China. Kirchner administration have very strict import and capital restrictions to protect its foreign currency reserves, which are needed to Argentina to repay its obligations. The country has to pay approximately 7 billion USD an year for energy imports and to pay its debts.
