It is reported that on the 12th of this month, Milley**, who had just come to power, put forward a request to China: to ask the Chinese side to ratify the currency swap agreement that the previous ** had agreed to expand, and to reach a currency swap between the two countries on a larger scale. This refers to the $6.5 billion currency swap agreement signed between China and Argentina's predecessor** (Fernandez administration), and Milley needs to "use" the yuan. In addition, on the same day, the Argentine Central Bank announced that it would reduce the official exchange rate of the peso to 800 pesos per dollar, compared to 366 per dollarThe 5 mark directly depreciated by half, which was considered the first step in Argentina's "shock".
The news mentioned that Milley once said during the election campaign that he was "not ready to do business with China and Russia", but it was surprising that their attitude changed so quickly. Argentina** mentioned that Milley's current "lack of money" is mainly used to repay debt problems and fill part of the foreign exchange gap, and that their international credibility of the peso is no longer high, and no country is willing to accept itTherefore, the purpose of "foreign exchange" is to obtain RMB to solve the urgent need, but even if China agrees, it can only provide a small amount of exchange quota. As for what he called "total dollarization", it is now out of reach, Argentina lacks enough dollars to function, and many areas remain insolvent.
On the 13th, the Russian Satellite News Agency quoted the "El País" as saying that in addition to proposing a currency swap agreement, Milley also proposed to China that it currently needs China's "financial assistance", and allocated the equivalent of $5 billion to Argentina for emergency debt repayment. Because Fernández** has already secured about $11.5 billion under the swap funds to repay the IMO** loan, Argentina is now looking to China for "help" while repaying the debt. Sources who disclosed the matter believe that it is equally important that Milley needs the foreign exchange funds released by the accumulation of Chinese funds for major import and export operations.
Analysts said that Argentina, regardless of the left and right wings, including Milley's team, will not neglect the development of relations with China, which is determined by objective reasonsBut it is not easy to hope that China will "help" to resolve the crisis. One is because the former Fernandez is at least interested in the BRICS system and cooperates sincerely with China, Russia, Brazil and other countries, and it is normal for China and Russia and other countries to provide currency swaps for them in this caseAnd Milley's actions are tilted towards Western countries, repeatedly calling for "integration into the Western economic system", and the foreign minister also expressed a lack of interest in joining the BRICS. The second is that they have "cut in half" the currency exchange rate without principles and regularity, which also makes other countries even less confident in holding Argentine pesos, and it is likely that the currency will be reduced to waste paper after currency swaps.
It is also worth mentioning that on the 13th, in response to Argentina's request for China's currency swap, China said that it is recommended to learn about the specific situation from the competent authorities, China has always attached importance to the development of China-Arab relations from a strategic height and long-term perspective, and China is willing to work with Argentina to promote the sustained and stable development of the China-Arab comprehensive strategic partnership. There is a comment on this: "Milley stressed many times at the inauguration ceremony that Argentina has no money but is in huge debt, and now Argentina is facing the problem of repaying the IMF's due debt at the end of the year, and it is not too sincere to 'ask for help' from China, and this matter will become a game of empty gloves and white wolves if they are not careful, especially when they are still concerned about the United States." ”