The Central Bank of Argentina (BCRA) and the People’s Bank of China renewed their bilateral currency swap this week, extending the facility’s term from three to five years. The agreement, valued at 130 billion yuan (roughly $19–20 billion), was due to expire on 6 August. The extension, the BCRA said, is designed to provide “greater predictability on the continuity of this tool.”

The swap, first signed in 2009 and periodically renewed, functions as a line of currency exchange between the two central banks. Argentina can draw yuan to finance authorised operations—such as import payments—without spending its own dollar reserves, depositing pesos with the Chinese counterpart and later reversing the transaction with interest. A tranche of 35 billion yuan (about $5 billion), activated in early 2023, remains available to “support financial stability in Argentina and give backing to trade and investment between both countries,” the BCRA stated. The mechanism can operate onshore, with funds staying inside China’s financial system at lower cost, or offshore, allowing conversion of yuan into dollars for international use.

The renewal consolidates a pragmatic turn in Buenos Aires. President Javier Milei, who before his late-2023 election said he would not deal with “communists” like China, has since adopted a more transactional stance; the swap was partially renewed in 2024 and 2025. BCRA president Santiago Bausili, who led the talks, had earlier described the dialogue as “very good” and the arrangement as “stable and quasi-permanent.” The central bank noted that the renewal “strengthens the close cooperation between both institutions and the excellent relationship they have maintained over the 17 years since the first agreement.”

The extension arrives as the government prepares for a 2027 election year, typically accompanied by financial turbulence, and as it pushes a reform of the BCRA’s charter, with legislative debate expected to begin in August. The swap, equivalent to roughly 40% of the central bank’s gross reserves, remains a central piece of the official strategy to accumulate reserves and maintain exchange-rate stability. The next milestone to watch is the start of the congressional discussion on the BCRA’s organic law.