Another Latin American Country further up its efforts to de-dollarize its crisis-hit economy on Wednesday. Argentina announced that it will begin paying for Chinese imports in yuan rather than dollar.
While the decision is considered in the context of the country’s immediate need to save its decreasing dollar reserves. According to an Al Jazeera story released in September 2019, the Argentines have long seen the US dollar as the one that drives their rivals across the country “crazy.”
Argentina’s Economy Minister Sergio Massa stated on Wednesday that in order to safeguard its international reserves. The government will pay for Chinese imports in yuan rather than dollars.
Massa stated at an event following a meeting with the Chinese ambassador, Zou Xiaoli. As well as companies from various sectors. That “the South American country will be able to programme a volume of imports in yuan worth. The equivalent of more than $1 billion from next month. Which will replace the use of Argentina’s dollars.”
According to Massa, the measure intends to reduce the outflow of funds.
Argentina plans to pay approximately $1 billion in Chinese imports in yuan rather than dollar in April. Followed by approximately $790 million in monthly imports in yuan, according to a government statement.
The decision comes as the South American country struggles with crucial levels of dollar reserves. A significant reduction in agricultural exports caused by a severe drought, and political uncertainty ahead of elections this year.
Argentina increased a currency swap with China by $5 billion in November of last year in order to boost the country’s overseas reserves.
According to Massa, the deal will allow Argentina “to work on the possibility” of accelerating import rates, with yuan-denominated import orders being authorised in 90 days rather than the customary 180 days.