It’s not the most important piece of news this morning, but it deserves some notice.
China has just wrapped another tentacle around Argentina, increasing its influence in Latrine America.
In the meantime, Argentina’s Castro-loving dominatrix, Cristina Fernandez de Kirchner, has bought some time and postponed the inevitable devaluation of her country’s currency.
Way to go, Cristina! What’s the next step? Will the People’s Liberation Army finally bring the Falkland islands into your possession?
Argentina Borrows $814 Million in Currency Swap
BUENOS AIRES–Argentina’s central bank tapped a currency swap line with its Chinese counterpart for the first time Thursday, requesting the equivalent of about $814 million at a time when its hard currency reserves are under pressure.
Argentina and China agreed to the 70 billion yuan currency swap during a state visit by Chinese President Xi Jinping in July. Argentine officials say the agreement will make it easier for Chinese companies to invest in Argentina and strengthen the central bank’s depleted reserves.
“Under this agreement, the central bank could request additional currency exchanges equivalent to a maximum of $11 billion,” the bank said in a statement Thursday.
The three-year currency swap allows the two central banks to lend as much as 70 billion yuan and the equivalent in Argentine pesos to each other for up to 12 months. China is Argentina’s No. 2 trade partner after neighboring Brazil.
The yuan can be exchanged for dollars or euros in international financial centers such as Hong Kong, London or Singapore, the central bank said.
President Cristina Kirchner needs all the hard currency she can get her hands on to avoid a major devaluation before she steps down at the end of her second term in December 2015.
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