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The President of the Argentine Central Bank, Santiago Bausili, and the Chancellor, Diana Mondino, are expected to undertake a trip to China later this month as representatives of a large delegation, according to a source who requested to remain nameless due to the sensitive nature of the visit, according to Bloomberg.
This trip arises in a context marked by crucial renewals and negotiations in the financial sphere between Argentina and China.
According to data provided by Bloomberg, the BCRA holds a currency swap line valued at US $18 billion with the People’s Bank of China, of which approximately US $5 billion must be renewed this year. These funds were widely used in the past to finance imports and debt payments, including disbursements to the International Monetary Fund (IMF).
The BCRA intends to renegotiate with the People’s Bank of China the deadlines for the first segment of the currency swap payments to avoid pressures on national reserves. Details surrounding the scale of the payments to be faced this year have not been specified yet.
The latest IMF Staff Report on Argentina indicates that the swap activated for US $4.9 billion will be refinanced this year, in line with ongoing efforts to secure it, as indicated by discussions with the monetary authority and the Ministry of Economy.
Furthermore, minister Mondino, after meeting with the Chinese ambassador in Argentina, announced her trip to Beijing in hopes of fostering trade relations between Mercosur and China.
“Each country has an interest in advancing as quickly as possible with some group of countries. I think that with China, it would be good for everyone”, Mondino stated during an interview granted to international press agencies.
The trip to China comes at a crucial moment for Argentina, which seeks to recover from a prolonged financial crisis. Thanks to the swap agreement with China, the country has been able to strengthen its foreign exchange reserves and address its financial obligations.
Bausili, the head of the BCRA, is currently in Washington participating in the IMF and World Bank meetings alongside the Argentine minister of economy Luis Caputo and secretary of finance Pablo Quirno. In 2023, officials from the previous Argentine government and China signed an agreement to renew and expand the currency swap line for about US $10 billion.
The Argentine government, led by president Milei, has recently undertaken a strategic shift in its foreign policy, seeking to consolidate pragmatic relations with China. Minister Mondino will visit Beijing on April 27, where key aspects of bilateral economic cooperation are expected to be discussed. Despite political differences, both parties recognize the importance of moving towards a more mature relationship.
Main source:
El presidente del Banco Central, Santiago Bausili, viajará a China: qué podría negociar | Infobae (April 18, 2024). https://www.infobae.com/economia/2024/04/18/el-presidente-del-banco-central-santiago-bausili-viajara-a-china-que-podria-negociar
Other related source:
Presidente del banco central de Argentina viaja a China a fin de mes junto a canciller: fuente | MSN (April 18, 2024). https://www.msn.com/es-us/dinero/noticias/presidente-de-banco-central-de-argentina-viaja-a-china-a-fin-de-mes-junto-a-canciller-fuente/ar-AA1nfLGl