Argentina will pay for products imported from China in yuan instead of dollars

Argentine Economy Minister Sergio Massa said yesterday that Argentina will pay for imports from China in yuan instead of US dollars to protect its dwindling foreign exchange reserves.

The Argentine Economy Minister, Sergio Massa, said in an act held after his meeting with the Chinese ambassador to Argentina, Zou Xiaoli, and representatives of various sectors, that the decision aims to reduce the contraction of the dollar.

COOPERATION IS INCREASING

Massa said during a meeting with Xiaoli in Buenos Aires that the South American country could schedule more than $1 billion in yuan import volume starting next month. In the statement, it was indicated that as of April, monthly imports of 800 million dollars will be paid in yuan.

Massa said they will increase import rates by confirming yuan import orders earlier than usual. Last year, Argentina expanded its currency swap with China by $5 billion to strengthen its international reserves.

THE ARGENTINE ECONOMY IS SHAKING

Argentina suffered a sharp drop in agricultural exports this year due to a record drought. In addition, the growing political uncertainty ahead of this year’s elections had a negative impact on the country’s economy. As the country struggled with critical levels in dollar reserves, the dollar rate and black market inflation continued to rise.

On the other hand, many parallel exchange rates apply in Argentina, such as special exchange rates for tourists, soybean producers and the stock market. There are also strict capital controls in the country, where the peso loses half its value in almost a year.

While government strategies such as price freezes, capital controls, and multiple exchange rates failed to ease pressure on the peso, the country experienced triple-digit inflation for the first time in 30 years, with 102 ,2 per year in February.