Argentina extends US$19 billion China currency swap despite US pressure

The Argentine central bank and the People’s Bank of China (PBOC) signed the extension of the 130 billion yuan line on Wednesday, a day before the existing deal was due to expire. The new term runs to 2031, two years longer than any previous renewal since the two countries first signed it in 2009.

The decision ends months of speculation over whether President Javier Milei, who campaigned on a vow never to do business with communists and is now widely seen as US President Donald Trump’s closest ally in the region, would let the swap lapse.

The longer term would provide “greater predictability over the continuity of this tool”, the Argentine central bank said.

A currency swap is a standing credit line between two central banks. Argentina can draw yuan from the PBOC, handing over pesos in exchange, and must return the money later with interest.

The full 130 billion yuan counts towards Argentina’s foreign reserves, but none of it can be spent until a tranche is activated, at which point the sum becomes a debt.