Jakarta –
Argentina and China officially agree to a trade deal or currency exchange valued at US$24.29 billion or Rp equivalent. 378.4 trillion (exchange rate of Rp. 15,600/US dollar). In this case, the Latin American country will increase the use of the Chinese currency.
As quoted by Reuters on Monday (09/01/2023), Argentina’s central bank said on Sunday that this deal allows the country to boost its depleted foreign exchange reserves.
The Argentine government itself needs to rebuild its foreign exchange reserves to cover future trade costs and debt service. This step is also in line with the fulfillment of the debt agreement with the International Monetary Fund (IMF).
Meanwhile, in a statement, the heads of the central banks of Argentina and China confirmed that the agreement between the two institutions had been activated.
“A currency exchange agreement between the two institutions has been activated and it is committed to deepening the use (of the Chinese yuan) in the Argentine market,” the central bank said.
The statement also specified the amount of exchange funds agreed, totaling 165 billion yuan or the equivalent of US$24.29 billion (Rp 378.4 trillion).
The fund consists of 130 billion yuan for strengthening international reserves and 35 billion yuan for special activation for clearing operations in the foreign exchange market.
“The exchange consists of a currency exchange to strengthen international reserves of 130 billion yuan and a special activation of 35 billion yuan to offset operations in the foreign exchange market,” the statement said.
It is well known that China itself is Argentina’s second largest trading partner, after Brazil, and the second largest destination for Argentine exports.
Previously, Argentine President Alberto Fernandez also announced the deal in November last year. At the time, the value only reached $5 billion or the equivalent of Rp 78 trillion.
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