In a first, Argentina, India make payments to IMF, Russia in yuan

ISLAMABAD: In a major threat to the hegemony of US dollar, the world trade has started in Chinese Yuan (RMB) as India and Argentina have made recent payments to Russia and the International Monetary Fund (IMF) respectively.

Short on dollars, Argentina on Friday made a $2.7 billion loan repayment to the International Monetary Fund partly using Chinese yuan, the economy ministry said.

To avoid dipping into its limited foreign currency reserves, the country also used so-called Special Drawing Rights — an asset created by the IMF to supplement countries’ official reserves — for part of the payment due.

IMF spokeswoman Julie Kozack in a statement confirmed: “The Argentine authorities continue to remain current on their financial obligations to the Fund.”

Government spokeswoman Gabriela Cerruti told reporters Thursday the payment would be made “partly with Special Drawing Rights of the Treasury and partly with yuan, without using Central Bank reserves.”

Argentina reached a deal with the IMF last year to restructure a loan of $44 billion — the legacy of a record loan contracted in 2018 under former president Mauricio Macri.

Argentina is the target of the largest IMF assistance program as it grapples with year-on-year inflation exceeding 100 percent, a severe shortage of foreign exchange and a poverty level of about 40 percent.

A record drought has seen agriculture exports plummet.

In April, the South American country announced it would use yuan to pay for Chinese imports instead of US dollars in order to preserve its reserves following a currency swap agreement with Beijing.

Kozack said technical discussions continue with Argentina “on a policy package to safeguard economic stability in the context of a challenging situation, partly affected by the historic drought.

“Discussions are focused on strengthening macroeconomic policies to support reserve accumulation and improve fiscal sustainability, while protecting the most vulnerable.”

A refinancing deal struck last year requires of Argentina to boost its international reserves and reduce the fiscal deficit.

India refiners start yuan payments for Russian oil imports

Mian Abrar
Mian Abrar
The writer heads Pakistan Today's Islamabad Bureau. He has a special focus on counter-terrorism and inter-state relations in Asia, Asia Pacific and South East Asia regions. He tweets as @mian_abrar and also can be reached at [email protected]


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