Posted on 05/03/2025 5:29:28 AM PDT by Cronos
Argentina renewed a $5 billion activated swap line with China for another year, the South American nation's central bank said on Thursday, shoring up dwindling foreign reserves as even more funds from the International Monetary Fund could soon pour in.
Argentina has long held the $18 billion swap line with China, though the activated portion for $5 billion was set to wind down by June. The activated line will be renewed in full through mid-2026.
Without an extension, the Latin American nation would have faced billions of dollars in repayments in coming months, a headache for libertarian President Javier Milei. While Milei has slashed public spending and wrestled inflation down to a monthly rate of 2.4% in February, the economy continues to struggle, with depleted reserves and high poverty rates. The Chinese swap line's renewal will allow the Argentine central bank to hedge risks as it transitions toward "consistent and sustainable monetary and exchange-rate policies" amid a tough global environment, the monetary authority said in a statement.
...However, Argentina's deal with China could put it in a tight diplomatic spot with Washington. A top regional envoy from the administration of U.S. President Donald Trump last week slammed the swap line for the influence it gave China over Argentina.
...the United States has long warned about what it calls Chinese debt diplomacy in Latin America. China says it offers tangible trade and investment to the region.
(Excerpt) Read more at reuters.com ...
Milei’s first mistake.
AGREED!
A little sad about this.
Oh, well
have we offered an alternative?
The Chinese Communist Party will eat their lunch
Milei wants nothing to do with collectivists or communists. Long term they’ll be ok.
yes, same reason that commie bitch from honduras, who severed relations with taiwan and now people from honduras are suffering, and the opposition leader promise to ask taiwan for forgivness
Argentina does not need the ability to swap/borrow in Chinese Yuan - unless Argentina has Chinese Yuan loans and obligations.
So where did this obligations come from?
He had no alternative
No, the USA offered no alternative. And the world bank and IMF weren’t visble.
Bessent explicitly stated that the U.S. was not considering providing a direct credit line to Argentina. Bessent’s suggestion relied on long-term reform success, which was uncertain and not an immediate substitute for the swap’s liquidity.
China is Argentina’s second-largest trading partner after Brazil, with bilateral trade exceeding $25 billion annually in recent years. Argentina exports agricultural products like soybeans, beef, and wheat to China, while importing manufactured goods, electronics, and machinery.
Since 2023, Argentina has increasingly used Chinese yuan to pay for imports from China, driven by a shortage of U.S. dollars in its reserves. This shift was formalized when Argentina began settling some Chinese import payments in yuan, reducing pressure on its dollar reserves.
😡
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