BUENOS AIRES (Reuters) – Argentina and China have extended the activated portion of a major currency swap line for the equivalent of $5 billion through July 2026, Argentina’s central bank said on Wednesday, allaying fears they may face major will have to make refunds. .
The South American country’s central bank said in a statement that it would extend the active tranche of a larger and long-standing $18 billion swap line for a period of 12 months, then gradually phase it out to zero by mid-2026.
The embattled country faced the prospect of billions of dollars in swap repayments this month and next month if it does not agree to an extension with China, a potential headache for libertarian President Javier Milei with depleted reserves.
The extension of the swap line would allow Argentina’s central bank (BCRA) to manage payment flows “at critical moments for the domestic economy,” the bank said in the statement.
“It reinforces the commitment made by the current management of the BCRA to overcome the external payments crisis, fully respecting the contractual obligations previously agreed with all its counterparts,” it added.
A currency swap line is a lending agreement between central banks that gives the receiving country access to an agreed amount of money in foreign currencies, such as dollars or euros.
Argentina also has a $44 billion program with the International Monetary Fund (IMF), which includes economic targets on growth, inflation and reserves. The government has said it will open talks with the IMF on a new program.
