According to the Argentinian Economy Ministry, the nation just used its stock of Special Drawing Rights (SDRs) as well as Chinese yuan to make its latest payment on its $44 billion International Monetary Fund loan. SDRs are created assets within the IMF which are designed to supplement a country’s official reserves.
Government spokeswoman Gabriela Cerruti said that the Central Bank’s US dollar reserves were not touched to make the payment.
At a press conference, Cerruti said, “This way, we comply with what we agreed upon with the Fund and, at the same time, we don’t use [international] reserves, nor we put the Central Bank’s reserves at risk.”
Bloomberg reported that the nation made the $2.7 billion payment by using $1 billion in Chinese yuan from a currency swap line with China, as well as $1.7 billion worth of SDRs.
In a statement on Friday, IMF spokeswoman Julie Kozack said, “The Argentine authorities continue to remain current on their financial obligations to the Fund.”
Argentina has seen its domestic economic problems drain its dollar reserves, which have hit their lowest levels since 2016, leaving its dollar position unusually precarious.
At the same time, the nation has been increasingly utilizing the Chinese yuan as a means of settlement. The country renewed a currency swap agreement with China for 130 billion yuan (roughly $18 billion) earlier this year, leaving the currency from China freely available around the nation.
The country’s central bank had announced last month that it would allow commercial banks to open customer accounts in Chinese yuan, as a way of encouraging local companies to use the yuan for settling payments overseas. The regulator also issued a statement pledging to increase its yuan sales to finance imports into the nation.
Economy Minister Sergio Massa announced in April that Argentina would seek to use Chinese yuan rather than US dollars to pay for the majority of its imports from China. After Brazil, China is Argentina’s second-biggest trade partner, as well as the second largest destination for exports from Argentina.
