In the framework of a meeting between the president of the BCRA and the governor of the PBC, the activation of the agreement between both institutions was confirmed
For iProfessional
01/08/2023 – 10:10 p.m.
The Central Bank of the Argentine Republic (BCRA) and the Bank of the People’s Republic of China (PBC) confirmed the current currency swap agreement between both institutions, within the framework of a meeting between the heads of the monetary entities during the Bimonthly Meeting of Governors of Central Banks organized by the Bank for International Settlements (BIS) in Basel.
The swap agreed between Miguel Pesce and Yi Gang “includes the exchange of currencies as a reinforcement of international reserves for 130 billion renminbi yuan and a special activation of 35 billion renminbi yuan to offset foreign exchange market operations,” according to what was specified from the BCRA.
In addition, from the entity led by Pesce they assured that the homonymous institutions of Argentina and China “committed to deepen the use of the RMB in the Argentine market for bilateral exchange.”
What will the swap be used for?
Currently, the BCRA has access to 35 billion yuan, which is equivalent to five billion dollars, to offset operations in the foreign exchange market and the rest of the swap is used to reinforce international reserves.
The confirmation of the swap takes pressure off the outflow of foreign currency from the Central Bank
The agreement was the subject of negotiation a long time ago, it had even been the subject of conversation in the last bilateral meetings between Alberto Fernández and Xi Jinping in 2022.
With the confirmation of the swap, companies that export to China will have the possibility to do so in both yuan and dollars, which takes pressure off the outflow of foreign currency from the Central Bank.
