BUENOS AIRES, Sept 17 (Reuters) - Argentina on Thursday took a step toward trading with China using the renminbi currency of the Asian economic powerhouse, its central bank said, part of a strategy to ease its reliance on its low dollar reserves.
Facing a dollar shortage, the South American country last year signed a currency swap deal with China worth up to the equivalent of $11 billion to strengthen reserves and pay for Chinese imports.
The two countries’ central banks on Thursday signed a memorandum of understanding that paved the way for the establishment of a local renminbi clearing house.
“Based on this agreement, a renminbi clearing bank will be appointed and will provide the financial structures needed for the settlement of transactions for trade and investment between the two countries and in accordance with regulations,” the Argentine central bank said in a statement.
Banking sources say the Argentine central bank has already tapped at least $8 billion-worth of renminbi. (Reporting by ELiana Raszewski; writing by Richard Lough)