The Dollar-Renminbi Tango: The Impacts of Argentina’s Potential Dollarization on its Relations with China

Xiaofeng Wang and Otaviano Canuto

No 2339, Policy briefs on Economic Trends and Policies from Policy Center for the New South

Abstract: The surprising victory of Javier Milei, the unconventional ‘anarcho-capitalist’ candidate, in the August primaries ahead of Argentina’s October 2023 general election, can be largely credited to his commitment to dollarize the Argentine economy, a move perceived as the ultimate solution to bring an end to the nation's economic turmoil. The potential shift from the local currency to the dollar has sparked concerns about Argentina's bilateral currency swap line with China. This swap line plays a crucial role in their bilateral relations and has also served as a means for Argentina to fulfill its debt obligations to the International Monetary Fund. The swap line is seen as a key element in preventing Argentina from defaulting on its IMF obligations, which is vital for both its economic and international financial stability. Given the significance of these developments, this article explores Argentina's potential shift towards dollarization and its implications for the country's relationship with China. It does so by assessing the critical role of the bilateral currency swap line between the Central Bank of Argentina (BCRA) and the People's Bank of China (PBOC) in backing Argentina's external payments.

Date: 2023-10
New Economics Papers: this item is included in nep-cna and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.policycenter.ma/sites/default/files/20 ... taviano%20Canuto.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ocp:pbecon:pb_39-23

Access Statistics for this paper

More papers in Policy briefs on Economic Trends and Policies from Policy Center for the New South Contact information at EDIRC.
Bibliographic data for series maintained by Policy Center for the New South's Customer service ( this e-mail address is bad, please contact ).