China and Argentina to Expand Swap Agreement by 6.5 Billion

On Wednesday, the presidents of China and Argentina, Xi Jinping and Alberto Fernandez, met in Beijing, where they agreed to extend the swap agreement, under which the South American country pays for its exports in yuan instead of dollars.

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"This is a guarantee to support Argentina's continued growth in production and employment," Fernandez stated, confirming the swap extension by US$6.5 billion.

The Argentine president has been visiting China since the weekend, first in Shanghai, and then moving on to Beijing to participate in the 3rd Forum of the New Silk Roads.

On Sunday, the Argentine people will celebrate presidential elections marked by a struggling economy with severe monetary and fiscal imbalances, stagnant activity, the looming threat of hyperinflation, and increasing poverty levels.

According to data available through July, the Argentine economy contracted by 1.8 percent, and it is projected that the GDP will decline by 2.8 percent by the end of the year.

As of September, the Consumer Price Index had reached 138.3 percent on an annual basis. According to the Central Bank's projections, however, accumulated inflation could reach 180.7 percent by the end of December. This would be the highest rate of price increase since the hyperinflation experienced by Argentinians in 1989.

All of this is happening while the demand for dollars continues to drive a depreciation of the Argentine peso, leading to a higher tendency for consumer price increases.