Argentine Minister of Economy said during a meeting in Buenos Aires with Chinese Ambassador Zhou Xiaoli that Argentina will program “part of its imports in yuan (equivalent to) more than one billion dollars next month.” He stressed that this mechanism would “replace” the use of Argentina’s diminishing dollar reserves.
Argentine Economy Minister Sergio Massa announced on Wednesday that his country intends to pay the price of its Chinese imports in yuan instead of the US dollar, in order to limit the depletion of its hard currency reserves.
Massa said during a meeting in Buenos Aires with Chinese Ambassador Zhou Xiaoli that Argentina will program “part of its imports in yuan (equivalent to) more than one billion dollars next month,” and stressed that this mechanism “will replace” the use of Argentina’s diminishing dollar reserves.
On Tuesday, the Argentine government accused the country’s right-wing opposition of causing the peso’s decline against the dollar, and ordered an investigation to be opened. The price of the peso was 227 against the dollar in the official exchange market on Tuesday, but it witnessed a greater decline in the parallel “blue” market. A blue market is a market in which there is little or no competition.
The deterioration of the Argentine local currency began last week, after days of pressure on the peso and amid uncertainty, before the elections in a country that applies exchange rate controls to limit the effects of the financial crisis and inflation that exceeded 100%.
Economist Maria Castiglione told TN television that the devaluation was partly a result of Argentines looking for a “haven” in US dollars to protect their purchasing power.
Massa indicated that the decision to pay in yuan improves “Argentina’s net reserves,” adding that it allows us to maintain “the volume of imports and the pace of trade between Argentina and China,” after a weak year for Argentine exports, which fell due to the damage to the agricultural sector due to the ongoing drought.
