Argentina abandons the dollar in trade payments with China

Argentina has announced that it will no longer pay for imports from China in dollars, but with the Chinese currency yuan. The decision was communicated after a meeting between the Argentine Economy Minister, Sérgio Massa, and the Chinese ambassador to the country, Zou Xiaoli.

The objective, according to the Argentine minister, is to preserve international reserves, in the midst of an exchange rate race faced by the South American country.

Argentina will be able to “schedule a volume of imports in yuan for more than US$ 1 billion [o equivalente a R$ 5 bilhões] starting next month, which will replace the use of dollars in Argentina” in operations with China, Massa said.

The minister also indicated that as of May there will be an average of US$ 790 million in imports of goods per month from China, which will begin to be paid in yuan.

Beijing and Buenos Aires had already implemented a “swap” or currency exchange mechanism that the South American country could use in case of need.

At the end of March, the Brazilian government had already announced an agreement between Brazil and China for commercial transactions without the use of the US dollar as an intermediary, in direct exchange between real and renminbi.

Although internationally called yuan, renminbi is the official name of the Chinese currency – yuan is the term used as a unit of monetary accounting, in a terminological distinction that does not exist in most other global currencies.

Currently, the US dollar represents 42% of the currencies used in international trade, against 33% for the euro, 6% for the pound sterling, 5% for the Japanese yen and only 2% for the yuan, according to the latest data from the international system of Swift payments.