Argentina gets another loan from China to shore up reserves

BUENOS AIRES: Argentina, which faces a shortage of hard currency, received a third tranche of a currency swap from China on Thursday to bolster its foreign reserves, the country's central bank said.

The central bank did not say how much it had received from the Asian economic powerhouse, but data showed its reserves at US$30.18bil, roughly $1 billion more than on Wednesday.

Analysts say the currency swaps provide only a temporary fix to Argentina's low reserves and do not solve currency imbalances in the economy that have been created by restrictive trade and currency controls.

The government on Wednesday launched its first dollar-denominated bond sale since its July default, a move seen as aimed at improving its hard currency cash flow and buying more time in a legal battle with creditors.

Argentina tipped into default for the second time in 12 years when a US judge ruled it could not service debt that was restructured after its record 2002 default before paying out in full to a small group of creditors who rejected the writedowns.

Argentina has now received a total US$2.4bil from China since late October. – Reuters