China and Argentina sign currency swap deal after G20 summit

Argentina‘s central bank has signed a deal with its Chinese counterpart to expand a currency swap programme by eight billion dollars, the bank said in a statement.

The agreement is an extension of a swap first agreed between the two countries in July 2017. The new deal, announced on Sunday during a state visit by Chinese President Xi Jinping, brings the total swap amount to $18.7bn.

In a currency swap, the first party borrows a specified amount of foreign currency from the counterparty, while at the same time, lending a corresponding amount to the counterparty in the currency that it holds.

Presidents Mauricio Macri of Argentina and Xi also announced more than 30 agriculture and investment deals.

China is among Argentina’s top export markets, especially for agricultural commodities that are the engine of its economy. The move is meant to reinforce economic and political ties between the two countries.

Macri said that China’s development benefits Argentina and the world.

The announcement comes after US officials said they had reached a 90-day truce in their trade dispute with China, a spat that has rattled financial markets and imperilled global economic growth.

That announcement followed a Saturday dinner meeting between Xi and US President Donald Trump following the G20 summit in Buenos Aires.

Xi is now scheduled to visit Panama, which has been negotiating a free-trade deal with China.