BUENOS AIRES, Sept 8 (Reuters) - Argentina will receive an initial instalment of Chinese yuan worth about $700-800 million before the year's end, said two senior banking sources familiar with the currency swap deal designed to bolster the South American country's sapped foreign reserves.
The payment, worth roughly 13 percent of a typical month's import bill for Argentina, will be the first since Latin America's No. 3 economy and China agreed to the credit facility agreement in July.
"There will be a disbursement by the end of the year. It will be worth around 700-800 million dollars," said one source on condition of anonymity.
The second source said Argentina would have one year to repay the initial disbursement at an interest rate of about 6 percent. The first source indicated the loan would pay a rate of 6-7 percent.
The swap will permit Argentina to either pay for Chinese imports with the yuan currency or reinforce its hard currency reserves which have fallen more than a third this year to around $28.4 billion, or roughly 4.8 months of import cover.
Argentina defaulted on its debt in July and is struggling to shore up its sapped foreign reserves without access to international capital markets.
Argentina's central bank chief, Juan Carlos Fabrega, met his Chinese counterpart on Sunday to discuss how the credit facility will be put into action, the Central Bank of the Republic of Argentina said on Sunday.
Leading daily newspaper La Nacion reported over the weekend that the first tranche would be equivalent to $1 billion. (Reporting by Walter Bianchi; Writing by Richard Lough; Editing by David Gregorio)