The Central Bank of Argentina has accelerated the sale of its Chinese yuan stash, using part of the swap line provided by the government of China while it tries to acquire dollars simultaneously. According to local sources, the country’s reserves have plunged to their lowest levels in eight years.
Central Bank of Argentina Using Chinese Yuan as a Lifeline
The Central Bank of Argentina has recently accelerated the sale of Chinese yuan from an approved swap line to maintain its operations. The $10 billion loan has enabled the bank to change its internal market dynamics and start selling yuan to national companies to finance their imports while at the same time purchasing dollars to regain some liquidity in foreign currency.
On July 10, the bank purchased $37 million but sold 790 million yuan, losing almost $72 million of its reserves that day. Then, on July 11, the bank purchased $9 million but had to sell 770 million yuan to national importers, taking losses by $98 million.
Economists
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