2025-04-10T21:22:15.000Z

---

BUENOS AIRES, Argentina (AP) In a significant financial maneuver, Argentina has successfully negotiated an extension of its long-standing currency swap agreement with China, enabling the South American nation to access an additional $5 billion. This development was announced on Thursday and offers some relief to Argentina's troubling foreign reserves situation. The deal highlights the crucial partnership between Argentina and Beijing, particularly in the face of criticism from the Trump administration regarding such alliances.

The Central Bank of Argentina confirmed that the countries have agreed to extend their existing $18 billion bilateral currency swap for an additional year. This arrangement allows Argentina to withdraw $5 billion more from the Peoples Bank of China, equating to approximately 35 billion yuan, a move that is set to remain in effect until mid-2026.

For Argentina, the ability to transact in renminbi instead of U.S. dollars is pivotal. It provides the national government with essential breathing room to stabilize its dangerously depleting foreign currency reserves. This maneuver is crucial for supporting the Argentine peso, which has been under intense pressure, and also aids local companies struggling to secure payments for Chinese imports. Furthermore, it facilitates investment opportunities for Chinese firms within Argentina, thereby increasing economic interaction between the two nations.

President Javier Milei, who has been grappling with a severe economic crisis and seeking to avoid a potentially catastrophic devaluation of the Argentine peso, is in desperate need of hard currency. This need is exacerbated by the necessity to finalize an initial bailout deal with the International Monetary Fund (IMF), aimed at stabilizing the country's dire economic conditions.

The announcement of the currency swap extension comes on the heels of remarks from U.S. Special Envoy for Latin America, Mauricio Claver-Carone, who expressed apprehension over the growing ties between Argentina and China, particularly in light of the U.S. administrations objectives in the region. Claver-Carone stated at a recent conference at Miami Dade College, We want the famous credit line that Argentina has with China to end. We want to be sure that any potential agreements with the IMF do not end up prolonging that credit swap that they have with China. ... Thats our priority. He further suggested that with the currency deal established, China will always be able to extort Argentina.

In response, the Chinese government quickly defended the currency swap arrangement. Lin Jian, spokesperson for the Chinese Foreign Ministry, characterized the agreement as a manifestation of practical cooperation with Argentina on the basis of equality and mutual benefit. He further emphasized that Argentinas currency swap has played a vital role in stabilizing its economy, a sentiment that is reportedly well-received within the country.

Under President Milei, Argentina faces the daunting challenge of maintaining a balanced foreign policy. As a radical libertarian, Milei has historically positioned himself as an ally of former U.S. President Donald Trump, having made at least ten trips to the U.S. in the past 15 months to attract tech investments, negotiate for free trade agreements, and secure additional funding from the IMF. However, during his presidential campaign, Milei did not hide his fierce opposition to China, labeling its leaders as assassins and pledging to avoid dealings with communist countries.

Yet, since assuming office and attempting to navigate the economic turmoil resulting from years of left-leaning populist governance, Milei has adopted a more pragmatic approach toward China. This shift acknowledges that China is among Argentinas largest trading partners, purchasing significant amounts of Argentine agricultural products such as soybeans, beef, and wheat. Additionally, China plays a critical role in operating hydroelectric dams in Argentina and holds strategic interests in sectors such as lithium mining and space exploration in northern Patagonia.

The Argentine Central Banks statement regarding the currency swap extension emphasized that this agreement aids in minimizing risks as Argentina transitions to a more stable and sustainable monetary and exchange rate regime amid a challenging global landscape for attracting external capital. Without the revival of this currency deal, Argentina would have faced a declining tranche beginning in June, worsening the pressure on its reserves during this critical juncture.