Argentina’s Central Bank Allows Banks to Open Accounts in Yuan

(Bloomberg) -- Argentina’s central bank will allow the country’s commercial banks to open customer accounts in yuan, as it seeks to address an acute shortage of dollar reserves and encourages local companies to make payments abroad in the Chinese currency.

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According to a statement published on its website, the central bank on Thursday said it had granted banks permission to take deposits in yuan, while it’s increasing its yuan sales almost daily to finance imports.

The move follows last week’s approval by the country’s securities regulator, known locally as the CNV, to permit issuance of securities in the local market that settle in Chinese yuan. The trend highlights both Argentina’s dire financial situation and China’s ambitions for the yuan.

Use of the Chinese currency in Argentina’s foreign exchange market is at a record thanks to an expanded swap line with Beijing and as dollar liquidity has dried up. The share of yuan in the foreign exchange market has already reached a record 28% of total transactions in a trading day, according to data from Mercado Abierto Electrónico.

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