Argentina Drops Dollar to Make Payment on IMF Loan
TEHRAN (Tasnim) – Argentina has made its latest payment of $2.7 billion on its $44 billion loan to the International Monetary Fund (IMF) by utilizing its stock of Special Drawing Rights (SDRs) and Chinese yuan, as confirmed by the Economy Ministry.
SDRs are IMF assets designed to supplement countries' official reserves.
Government spokeswoman Gabriela Cerruti stated that the payment was made without tapping into the Central Bank's US dollar reserves. Cerruti emphasized at a press conference, "This way, we comply with what we agreed upon with the Fund and, at the same time, we don't use (international) reserves, nor do we put the Central Bank's reserves at risk."
According to Bloomberg, Argentina used $1 billion in yuan from a currency swap line with China and $1.7 billion of SDRs for the $2.7 billion payment.
IMF spokeswoman Julie Kozack affirmed in a statement on Friday, "The Argentine authorities continue to remain current on their financial obligations to the Fund."
Argentina has been increasingly relying on the yuan as an alternative payment method. Earlier this year, the country renewed a currency swap agreement with China worth 130 billion yuan (approximately $18 billion), making the Chinese currency readily available in Argentina. Last month, Argentina's central bank announced its intention to allow commercial banks in the country to open customer accounts in yuan, encouraging local companies to conduct foreign payments using the Chinese currency. The central bank also pledged to increase yuan sales to finance imports, as stated on its website.
In April, Economy Minister Sergio Massa revealed Argentina's aim to pay for the majority of its monthly imports from China in yuan instead of US dollars. China currently holds the position of Argentina's second-largest trading partner, following Brazil, and is the second-largest destination for Argentinian exports.
