Argentina Renews Agreement With China On Currency Swapping

Argentina has agreed to renew its currency swap line with China, doubling the amount it can access to near $10 billion, the South American country's central bank said in a statement on Friday, providing a boost to its dwindling foreign currency reserves.

The two countries agreed to extend the total 130 billion yuan ($18.4 billion) swap line for three more years, eventually doubling the freely accessible portion of the swap from 35 billion yuan to 70 billion yuan ($9.9 billion).

"The procedure has begun to increase the usable amount by another 35 billion yuan," Argentina's central bank said after a meeting of officials in Beijing.

"This increase will come into effect once the first tranche of the extension used for commercial exchange between the two countries is exhausted and with the agreement of the parties."

The country's foreign currency reserves have fallen sharply this year due to a historic drought that slashed grains exports, the main source of dollar revenue, and the peso currency has weakened under the weight of 109 per cent annual inflation.

Argentina's Ministry of Economy said that the swap would be in a single tranche and would be freely available for any type of financial operation, adding that the country would look to promote more yuan spot and future operations.