“Argentina has a currency exchange with China, which works not only as a tool to build up reserves, but also as a financial and commercial tool,” Economy Minister Sergio Massa said during a meeting. with Chinese Ambassador Zou Xiaoli. He also pointed out that the transition to the yuan will reduce the price of goods en route to Argentina and speed up their importation, which is essential for industries that drive the local economy.
The authorities expect that the active use of the swap with China will allow Argentina to save US dollars, which will be accumulated by the country’s central bank. American currency is needed in Buenos Aires not only to solve internal problems, but also to settle the multi-billion dollar public debt with the International Monetary Fund. Recall that last month, Brazil and China reached an agreement to stop using the US currency for all types of bilateral trade.
Many local experts have already been quick to dub this event as “the beginning of Argentina’s de-dollarization process”. According to Andres Serbin, president of the Latin American analysis center CRIES and expert of the Valdai club, this is not entirely true. “As for Argentina, the decision taken by the government is not directly related to the desire to get rid of the dollar as soon as possible. There are simply no conditions for this. Given the economic situation country’s current situation, the authorities are forced to use all available tools to somehow stabilize the economy and solve a problem of public debt, budget deficit and runaway inflation,” Serbin said. in a comment for RG.
At the same time, the Argentine pointed out, the erosion of the US dollar as the world’s reserve currency is a process already underway. “It is linked, among other things, to the dynamics observed in the world, and not only within the BRICS, but also in other countries unhappy with the dominance of the dollar in the international system. Moreover, these countries see that the American currency is being used as a weapon to promote sanctions, as is the case with Russia, that is to say, we are seeing a general reaction, especially in the southern states, which are looking for new opportunities to replenish and maintain their reserves in another currency, if only in dollars”, underlined Andres Serbin.
According to the analyst, there are certainly different possibilities at present, and that there is indeed a tendency to use the yuan more and more. However, so far this does not mean a complete rejection of the US currency globally. In many countries, the dollar remains the main reserve currency.
“Although it should be noted that recently many central banks have markedly stepped up the purchase of gold as an alternative. It is evident that the use of the dollar is gradually decreasing. now down to 58, the euro is second and the yuan is gradually gaining ground,” Serbin said.
The declining influence of the dollar, Andres Serbin is convinced, is directly linked to the declining role of the United States in global processes. States are trying to retain their leadership position, but they themselves face serious problems in their own economies. And this is reflected not only in the current inflation and the extremely high probability of a recession, but also in the growing banking crisis.
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