BUENOS AIRES (Reuters) - Argentina’s central bank chief, Juan Carlos Fabrega, met his Chinese counterpart on Sunday to discuss how a currency swap worth billions of dollars will be put into action, the Argentine monetary authority said.
The swap will allow Argentina to bolster its foreign reserves or pay for Chinese imports with the yuan currency at a time weak export revenues and an ailing currency have put the Latin American nation’s foreign reserves under intense pressure.
The South American country’s La Nacion newspaper reported that the Buenos Aires government would receive a first tranche of yuan worth $1 billion before the end of the year, without saying how it obtained the information.
It would be part of a loan worth a total $11 billion signed by Argentina’s President Cristina Fernandez and her Chinese counterpart in July, shortly before the Latin American nation defaulted on its debt for a second time in 12 years.
In its statement, the Central Bank of the Republic of Argentina made no reference to the timetable.
Argentina’s latest default came after a U.S. court blocked a coupon payment to holders of its performing debt because of a legal fight with U.S. investment funds who rejected the bond swaps that followed the country’s record 2002 default.
“During the meeting, the head of the People’s Bank of China conveyed to Fabrega his country’s support to Argentina in its dispute with bondholders in a New York Court,” Argentina’s central bank said in a statement.
Fernandez’s government has imposed stringent import and capital controls to safeguard the dwindling reserves, now at around eight-year lows, which it needs to pay its debts.
Reporting by Richard Lough; Editing by Sandra Maler