Argentina avoided tapping into China’s currency swap by securing a loan from CAF to pay its IMF debt, amid tensions with China after Milei’s victory.
Argentina’s new government recently sent its scheduled debt payment to the International Monetary Fund (IMF) by securing a loan from the CAF – the Development Bank of Latin America and the Caribbean. President Javier Milei avoided tapping a currency swap line from Beijing, a move that had been under consideration for some time. The president’s inauguration and swift diplomatic maneuvering with China appear to have played a role in the avoided currency swap.
Since his victory and subsequent inauguration, conversations between Argentina’s government and China have been largely under the radar. Milei’s meeting with Chinese envoy Wu Weihua prompted the president to send a letter to Xi Jinping the very next day. The details of the letter have not been disclosed, but Argentine media suggested it contained language related to the currency swap previously implemented by Milei’s predecessor. As a result, Argentina avoided an agreement with Beijing in favor of a loan from the CAF.
The intricacies behind the potential currency swap with China were complicated. Chinese representatives had conveyed that activating the credit line was contingent on clarifying Argentina’s monetary stance. Milei’s appointment to the Central Bank had discussions with Chinese Ambassador Wang Wei concerning the credit line, but no specific agreement was reached. The situation ultimately led to the freezing of the currency swap previously offered to Argentina. A London-based strategist noted that the recent events might suggest that China understands the need to foster relationships with all parties, friendly or not.
Source : Milei’s Government Pays IMF Without Tapping China Currency Swap
