Latin American economies shun unipolar system with RMB's internationalization

The currency-swap agreement between China and Argentina must be among the major achievements of China-Latin America financial cooperation. First signed in 2009, it was the first of its kind between China and a Latin American country.

For Argentina, the deal came as a crucial financial lifeline, reinforcing its foreign reserves and enhancing its ability to meet international debt obligations, including those to the International Monetary Fund. The swap agreement enables the country's central bank to access renminbi that can be converted into dollars, bolstering foreign reserves and, by extension, the Argentine government's ability to repay creditors including the IMF.

Over the past 16 years, this mutually beneficial agreement has been renewed multiple times, with the latest extension in June 2024 securing a 35 billion yuan ($4.76 billion) swap line. For Argentina, which is grappling with severe economic instability, the deal has eased short-term repayment pressures and provided much-needed fiscal flexibility.