Argentina Will Use Yuan To Pay the IMF and Not Touch Dollar Reserves

Argentine Finance Minister Sergio Massa announced early this morning that in order to pay $2.7 billion due the IMF today, he will not use any of the Central Bank’s scarce dollar reserves, but rather rely on the yuan swap from the People’s Bank of China (PBC) in the amount of $1.7 billion plus the $1 billion bridge loan provided by the Development Bank of Latin America (CAF). He thanked the CAF, 20 of whose 21 members had approved the loan to Argentina on July 28, for supporting the country “in preserving its foreign reserves.” Massa thanked the Chinese government and the PBC for allowing him to dip into the second tranche of the $18 billion swap to make this payment, so as not to further reduce foreign reserves.