Argentina, China extend $19bn currency swap

Argentina and China extended a 130-billion-yuan, roughly $19 billion, currency swap agreement by five years, Argentine financial authorities said Wednesday.

The agreement between Beijing and Buenos Aires has been in effect since 2009. Previous renewals had lasted three years at a time.

Argentina's central bank said the longer extension was intended to provide “greater predictability regarding the continuity of this tool.” It said a 35-billion-yuan tranche released in 2023 would remain in effect.

The central bank said the measure was meant to “strengthen financial stability in Argentina and to support trade and investment between the two countries.”

Argentina has struggled to secure enough foreign currency to pay international debts while trying to keep its own currency stable. The renewal comes as the central bank seeks to increase global reserves before next year's presidential elections, which are often accompanied by financial turbulence.

Argentina signed a separate $20 billion currency swap deal with the United States before legislative elections last year.

President Javier Milei had promised during his 2023 campaign that he would not do business with China or “with any communist,” but later adopted a more pragmatic approach while maintaining close relations with US President Donald Trump.

“Geopolitics is one thing, commerce is another,” Milei said earlier this year, adding that he remained “deeply aligned geopolitically with the United States.” China is Argentina's second most important trade partner after Brazil.