Cash-strapped Argentina has added more than $500 million to its foreign currency reserves by activating a currency swap agreement with China, the government said Tuesday. It was the second time since October 30 that Argentina's government has drawn on the $11 billion dollar currency swap agreement reached with China in July to shore up its foreign reserves.
The latest tranche lifted Argentina's foreign reserves to $28.785 billion, the government said. The first tranche was for $814 million. The government statement did not give the exact amount of Monday's swap, but a government source said "in total it represents $506 million for the monetary reserves."
Argentina's foreign reserves plunged earlier this year amid capital flight and growing economic uncertainties, prompting the government to tighten foreign currency controls. The South American country has been shut out of the international financial markets since a 2001 default, forcing it to rely on its dollar reserves to pay creditors. Attempts to restructure the debt have become entangled in a legal battle with hold-out creditors demanding repayment in full.
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