Argentina has announced that moving forward, all Chinese imports will be paid for in yuan instead of dollars, continuing a trend that has witnessed more and more countries across Ibero-America, Asia, and the Middle East settling trade arrangements in national currencies or yuan instead of dollars.
In the announcement, delivered Wednesday, April 26th during a press conference that followed a meeting with China’s ambassador Zour Xiaoli, Argentina’s Economy Minister Sergio Massa said that Buenos Aires aims to pay for around $1 billion of Chinese imports in yuan instead of dollars in April, and thereafter around $790 million of monthly imports will be paid for in Chinese currency, El Diario AR reports.
The move comes after Brazil, Ibero-America’s largest economy, earlier this month reached a deal with China to dump the U.S. dollar as an intermediary currency the two economic juggernauts have used to conduct trade and financial transactions, opting instead to settle bilateral trade agreements with the yuan and reais.
Regarding the shift away from using dollars to settle trade agreements with China, Massa told members of the press that it would help to ease the outflow of dollars in the country’s foreign reserves that has come amid a sharp decline in agricultural exports caused by a historic drought.
“Following the worst drought in history, Argentina must keep its [foreign] reserves robust,” Massa said, adding that the currency swap with China “works not only as an instrument to strengthen its [international] reserves but also as a financial and commercial instrument.”
Argentina, which has Ibero-America’s third-largest economy, is the latest key geopolitical actor to take steps to reduce its dependence on the U.S. dollar.
As The European Conservative previously reported:
Beijing has similar currency deals with Russia, Turkey, Pakistan, and several other countries—and it continues to expand the list of countries. In February 2022, members of the China-led Shanghai Cooperation Organization (SCO)—a bloc that consists of China, Russia, India, Pakistan, Uzbekistan, Kazakhstan, Tajikistan, and Kyrgyzstan—agreed to increase the use of their national currencies in trade between the countries.
One day before Argentina’s announcement, it was revealed that the yuan in March became the most widely-used currency for cross-border transactions in China, overtaking the dollar for the first time.
Increasingly, the Chinese yuan is becoming one of the preferred currencies used in international trade settlements. In 2022, 42.1 trillion yuan (5.5 trillion euro) worth of China’s cross-border payments and receipts were settled in the Chinese yuan, an uptick of 15% year over year and marking the fifth straight annual increase. In the same year, the international usage of the yuan increased by 26.6%. At the moment, it is the fifth most held currency in global foreign exchange reserves.
