Argentina’s Central Bank allows banks to open accounts in Chinese currency

Argentina's Central Bank will allow the country's commercial banks to open customer accounts in yuan, as it seeks to address an acute shortage of dollar reserves and encourage local companies to make overseas payments in Chinese currency.

According to a statement posted on its website, the Central Bank said Thursday it had granted banks permission to receive yuan deposits, while increasing its yuan sales almost daily to finance imports.

The move follows last week's approval by the country's securities regulator, known locally as CNV, to allow the issuance of securities in the local market that are settled in Chinese yuan. 

The trend highlights both Argentina's dire financial situation and China's ambitions for its currency.

The use of Chinese currency in Argentina's foreign exchange market is at a record high thanks to an expanded swap line with Beijing and as dollar liquidity has dried up. The yuan's share of the foreign exchange market has already reached a record 28 percent of total transactions in a trading day, according to data from Mercado Abierto Electronico.