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China, Argentina agree on 10bln dollar swap line

Posted on: April 1, 2009


AFP – Wednesday, April 1

MEDELLIN, Colombia (AFP) – – The central banks of China and Argentina agreed Tuesday to a currency swap line of 10 billion dollars, a move aimed at helping the South American nation ease a liquidity crunch, officials said.

Argentine central bank president Martin Redrado, who signed the deal with his Chinese counterpart at a meeting in Colombia, said the three-year swap line “can be used for all financial and monetary operations.”

The agreement was signed with Chinese Central Bank Governor Zhou Xiaochuan on the sidelines of the annual meeting of the Inter-American Development Bank.

Sources in Argentina said the precautionary line of credit would help Argentina ease a credit squeeze and finance imports from China.

It would also help the Argentine central bank avert a drain on its hard currency reserves, which currently amount to some 47 billion dollars, say sources in Buenos Aires.

China has made similar arrangements with Hong Kong, Indonesia, South Korea and Belarus. The US Federal Reserve has offered swap lines to several nations including Mexico and Brazil to provide dollars to countries facing a credit squeeze.

“Clearly it is done within the framework that the Federal Reserve has done with other countries, is a ‘swap’ line, Argentina does not need it,” Redrado said.

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1 Response to "China, Argentina agree on 10bln dollar swap line"

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