The main commercial partners of Argentina They devalue their currency in the middle of the commercial war. The Real lost 1.6% and reached 6.01 units per dollar on the previous day further affecting the commercial balance of Argentina that is already deficit with Brazil. Meanwhile, Yuan ended Wednesday the day to its weakest level since December 2027, closing at 7,3498 per dollar. This occurs while the escalation of the commercial war between China and the United States Continuous currency markets continue to impact.
The counterpart Yuan offshore also fell to historical minimums during the night. This weakening of the Yuan continues to the implementation of the “reciprocal” tariffs of US President Donald Trump about dozens of countries, which entered into force on Wednesday. These tariffs include a significant tax of 104% on Chinese products.
The BCRA maintains part of its international reserves in Yuan (Renminbi), especially since the coin swap With the Popular Bank of China. If the yuan devalates against the dollar, the dollar value of those assets falls, which reduces the total reservations expressed in dollars (The standard unit to measure international reserves). Therefore, eThe effect of the devaluation of the Yuan is seen in the gross reserves.
Argentina has an agreement of currency swap With China, which allows you to access YUANs to strengthen reservations or face international payments. If the yuan depreciates, the effective value of the amount available in the swap is also reduced in dollars, which limits the ability of the BCRA to use that support in a context of financial stress. In addition, if in the future we wanted to convert that swap into dollars to intervene in the market, the conversion would be less favorable.
Although the Swap coin agreement with China was initially for 130,000 million yuanes – equivalent to about 18,000 million dollars – Argentina already made use of more than 4.9 billion dollars of the first section enabled. This amount was mainly allocated to the payment of imports and the fulfillment of commitments with the IMF and private creditors during Sergio Massa’s management as Minister of Economy.
2. Commercial balance
A Yuan devaluation can make Chinese products cheaper in dollarswhat could Increase imports from China. For Argentina, this generates a Commercial imbalance If exports do not grow at the same pace, affecting the accumulation of net reserves.
Apart mention: geopolitical tension between the US and China in Argentina
The Popular Republic of China responded to the criticisms of the United States regarding the Co -Swap agreement with Argentina. Through an official spokesman, the Xi Jinping government stressed that ‘The exchange of foreign exchange between China and Argentina contributes to the country’s economic and financial stability ‘, emphasizing that this collaboration is supported by the Argentine government.
The Chinese comment arises in response to the declaration of Mauricio Clever Carone, US advisor for Latin America, who demanded the suspension of mutual credit between the two countries. Clever Carone mentioned that the cancellation of this financial assistance is necessary to strengthen the Agreement of the International Monetary Fund (IMF), arguing: “We want the famous credit line that Argentina has with China ends.”
In your speech, The Chinese spokesman urged the United States to adopt “a correct perspective” already consider how could contribute to the development of Latin American countries and the Caribbeansuggesting that a collaborative approach would benefit everyone. The application was made in the midst of an international context where relations between powers and developing countries are increasingly relevant.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
