Argentina, China extend currency swap deal

Argentina and China on Wednesday extended a multi-billion-dollar currency swap agreement by five years, financial authorities reported.

The 130-billion-yuan (roughly US$19 billion) agreement between Beijing and cash-strapped Buenos Aires has been in effect since 2009. Ity comes with the montetary authority seeking greater stability ahead of the upcoming 2027 election.

The five-year extension follows previous renewals of three years at a time.

The longer period aims to provide "greater predictability regarding the continuity of this tool," Argentina's Central Bank said in a statement.

A 35-billion-yuan tranche released in 2023 will remain in effect, the statement added.

The measure intends to "strengthen financial stability in Argentina and to support trade and investment between the two countries," it said.

A serial defaulter, the nation has struggled to get enough foreign currency to pay off international debts while keeping its own currency stable. 

The renewal comes as the Central Bank looks to increase its global reserves ahead of next year's presidential elections, with polls typically marked by heightened financial turbulence.

Before legislative elections last year, Argentina signed a separate currency swap deal worth US$20 billion with the United States.

President Javier Milei had promised he would not do business with China or "with any communist" on the campaign trail ahead of his victory in 2023.

But he adopted a more pragmatic stance once in office, while also maintaining close relations with US President Donald Trump.

"Geopolitics is one thing, commerce is another," he stated earlier this year, adding that he remained "deeply aligned geopolitically with the United States."

China is Argentina's second-most important trading partner after Brazil.

– TIMES/AFP