ARGENTINA is taking steps towards de-dollarizing its economy by beginning to pay for Chinese imports in yuan instead of US dollars.
This move is seen as an attempt to decrease the country’s dependence on the US currency, which has been a significant factor in the Argentinian economy and daily life for many years.
A government statement announced that Argentina will pay around $1 billion worth of Chinese imports in yuan in April, followed by approximately $790 million worth of monthly imports in yuan thereafter.
The decision aims to ease the outflow of dollars as Argentina battles critical levels in its dollar reserves.
The South American nation has been heavily reliant on the US dollar, with the currency playing a significant role in important transactions such as those in real estate. However, Argentinians have long viewed the US dollar as a cause of problems – or one of – for their economy.
In November 2022, Argentina expanded a currency swap with China by $5 billion in an effort to increase its yuan reserves.
This agreement allowed Argentina to advance the rate of imports with yuan-denominated import orders being authorized in 90 days rather than the standard 180 days.
The announcement was made by Argentina’s Economy Minister, Sergio Massa, during an event following a meeting with the Chinese Ambassador, Zou Xiaoli, as well as companies from various sectors.
It can be noted that Argentina’s decision to pay for Chinese imports in yuan is a significant move in the country’s efforts to decrease its dependence on the US dollar and de-dollarize its economy.
