According to the USA Central Bank declared that Argentina and China signed a swap deal of $9 billion currency for enhancing the crisis-hit foreign currency reserves of South American Country.
Fighting to heal after a currency crisis this year, third largest economy of Latin America looked out for the aid of the International Monetary Fund – which sanctioned a $56 billion loan package.
Now, this latest endorsement will “contribute to greater financial stability and also facilitate trade ” between Argentina and China, according to the statement of the bank.
A currency swap observes two parties approve to exchange a definite amount of foreign currency at a preset rate, shielding against swings.
The Central Bank of Argentina will be able to extract on these funds in an emergency. The endorsement pursued the G20 summit in Buenos Aires, as the Chinese President Xi Jinping was accepted by his counterpart of Argentina Mauricio Macri for a state visit. The two countries endorsed 30 financial and trade agreements in total.
Chinese President Xi told in a press conference, “ We are extending cooperation on economic, agricultural, financial and infrastructure issues”.
After Brazil, China is the second largest trade partner of Argentina. In 2017, the relationship was totally in favor of Beijing. China sent $17 billion of goods to Argentina while importing $8 billion in goods from that country.
Buenos Aires and Beijing also approved another currency swap in 2014, while issued $11 billion for consumed treasury reserves of Argentina.