Argentina’s economy is — again — in crisis. A drought has wiped out key agricultural exports, pushing the economy, already grappling with skyrocketing inflation, to the brink of recession.
With Argentina’s supply of U.S. dollars dwindling as a result, the government in April announced it would pay for $1 billion worth of imports from China in yuan — and for $790 million worth of monthly imports thereafter.
It also activated a currency swap agreement, making it possible for companies to borrow yuan from China, Argentina’s second-largest trading partner.
The deal was welcome news for Beijing, which has long wanted its currency in wider use and to enjoy some of the power and prestige that the United States enjoys thanks to the dollar’s global domination.
