From BRICS to the currency swap: government officials visit China

Economy Minister Sergio Massa and Deputy Máximo Kirchner’s agenda this week

A group of political officials and representatives is embarking today on a week-long trip to China, where key meetings will be held to address financial goals amid economic turmoil. 

Economy Minister Sergio Massa, National Deputy Máximo Kirchner, and Energy Secretary Flavia Royón — along with over a dozen officials from Casa Rosada, Congress, the Central Bank as well as the foreign affairs, energy and finance sectors — will spend the upcoming days in Beijing and Shanghai meeting with Chinese businesspeople, banking leaders, and high-profile politicians. 

The trip comes amid a week of political definitions inside the ruling coalition Frente de Todos (FdT), where Massa and Kirchner stood together behind Vice President Cristina Fernández de Kirchner during her speech in Plaza de Mayo on Thursday. Both of them play key roles in Peronism’s political negotiations and Massa is considered a potential presidential candidate. 

A spokesperson for the Economy Ministry told the Herald that the official trip will focus on settling cooperation agreements around energy, exports, and potential investments and infrastructure works on Argentine soil. It will also look into strengthening Argentine monetary reserves with BRICS banks. 

The acronym BRICS refers to the economic alliance between five countries considered to be rising powers: Brazil, Russia, India, China, and South Africa.

Upon landing in Shanghai on Tuesday, Massa and his working group will meet with representatives from the Gezhouba Group Corporation (CGGC) to discuss the ongoing construction of hydroelectric dams on the Santa Cruz river in the province of the same name. 

Massa and his team will also hold meetings on energy development in Argentina, boosting the electric energy sector, and increasing mining and lithium extraction investments. 

On Thursday, Massa will meet with former Brazilian president and New BRICS Bank (NBB) President, Dilma Rousseff. 

Rousseff is a key actor in Argentina’s pursuit of joining BRICS. In May, President Lula da Silva promised Argentina’s President Alberto Fernández to intercede on the country’s behalf with the BRICS banks to help bolster Argentina’s monetary reserves. 

Massa will also take part in the 8th Annual Meeting of the NBB, which will be held on May 30 and 31. 

“Argentina is very committed to the spirit of BRICS,” said Argentine Ambassador in China Sabino Vaca Narvaja, in a press statement. 

On the second half of the trip, in Beijing, the Argentine agenda will focus on bilateral cooperation and trading, especially in the energy sector. A spokesperson for Massa told the Herald that Economy Ministry representatives expect to agree on expanding Argentina’s currency swap line with China

Argentina has free access to some US$5 billion as part of the China currency swap agreement that totals 130 billion yuan (US$18.81 billion). The two countries activated the usable portion in January to help bolster Argentina’s peso. Now, Argentine authorities will seek to expand that amount.

China has been touting international usage of the yuan currency as a rival to the U.S. dollar, gaining a foothold in South America where it is the largest trade partner for many regional economies.

A month ago, the government announced the start of foreign exchange operations in yuan for importing companies in order to relieve Argentina’s ailing international reserves. Argentina needs to rebuild its reserves to cover trade costs and future debt repayments, as well as to meet economic targets under its $44 billion loan program with the International Monetary Fund (IMF), which it is currently trying to revamp.

Argentina’s foreign currency reserves have fallen sharply this year as a major drought battered exports of cash crops corn and soy and the peso weakened, pressured by 109% annual inflation and political uncertainty ahead of elections in October.


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