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China agrees US$9b currency swap with Argentina

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China and Argentina signed a US$9 billion currency swap deal to boost the crisis-stricken South American country's foreign currency reserves, its central bank announced Sunday.

[BUENOS AIRES] China and Argentina signed a US$9 billion currency swap deal to boost the crisis-stricken South American country's foreign currency reserves, its central bank announced Sunday.

Struggling to recover after a currency crisis earlier this year, Latin America's third largest economy sought the help of the International Monetary Fund - which approved a US$56 billion loan package.

Now, this latest agreement will "contribute to greater financial stability and also facilitate trade" between China and Argentina, according to the bank's statement.

A currency swap sees two parties agree to exchange a certain amount of foreign currency at a pre-determined rate, protecting against fluctuations.

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Argentina's central bank will be able to draw on these funds in an emergency.

The agreement followed the G-20 summit in Buenos Aires, as Chinese President Xi Jinping was received by his Argentine counterpart Mauricio Macri for a state visit.

The two countries signed 30 trade and financial agreements in total.

"We are extending cooperation on economic, agricultural, financial and infrastructure issues," Mr Xi told a press conference.

After Brazil, China is Argentina's second largest trade partner.

In 2017, the relationship was firmly in Beijing's favor: China exported US$17 billion of goods to Argentina, while importing US$8 billion of goods from that country.

Beijing and Buenos Aires also agreed another currency swap in 2014, which provided US$11 billion for Argentina's depleted treasury reserves.

AFP