Argentina allows commercial banks to open deposit accounts in Chinese yuan.
The country is facing an acute shortage of US dollars, the main currency used in global trade.
The Argentine peso has fallen nearly 80% against the dollar since the beginning of 2020.
Argentina is facing such an acute shortage of US dollars that it now allows commercial banks to open deposit accounts in Chinese yuan.
The Argentine Central Bank said in a statement Thursday statement on their website They allow the Chinese Yuan as a form of currency in savings accounts and checking accounts.
The central bank added that the move complements the country’s securities authority’s announcement that Argentina can issue Chinese currency securities.
Argentina – who is already allowed Opening bank accounts using deposits in US dollars – He works to enhance his use of the yuan after the severe shortage of the US currency.
in April, The country began paying for imports from China in yuan. Recently, Argentina partially repaid $2.7 billion to the International Monetary Fund using the yuan Buenos Aires Times reported, Citing sources from the country’s economy ministry on Thursday.
Argentina has turned to the yuan as an alternative currency because its dollar reserves with the central bank are at their lowest level since 2016 — partly due to an ongoing drought affecting the country’s agricultural exports, according to a June 23 date. bloomberg a report.
The drought meant that Argentina sold fewer crops, whose sales are determined globally in US dollars. This, in turn, led to the dollar crisis. This also means that it is more difficult for a country to trade internationally because goods are generally denominated in dollars.
Moreover, the Argentine peso has collapsed against the dollar, down 30% this year – making it much more expensive to buy any US dollar. The peso has lost nearly 80% of its value against the dollar since the beginning of 2020.
All these developments opened a window of opportunity for yuan, which Beijing is trying to internationalize.
China is trying to increase the global circulation of the yuan, using the currency For almost all of the Russian oil it has bought over the past year, Reuters reported in May, citing several business executives with first-hand knowledge of the matter.
in Argentina, Yuan transactions in the country’s currency market reached about $285 million in the first 10 days of June alone — double the volume in the whole of May as more than 500 companies look to pay for imports in Chinese currency, Bloomberg reported on June 23.
Despite the increase in the use of the yuan, a major Argentine politician refuses to move away from the dollar. Suggested by Javier Melly, the leading presidential candidate exchange the peso b dollar as the domestic currency of Argentina to tame inflation.
“The peso is melting like ice in the desert,” Miley Miley is known to say, according to her bloomberg.
Argentina’s central bank did not immediately respond to a request for comment from Insider sent outside normal business hours.
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