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Chinese currency swap helps lower Argentine debt: report

Xinhua, August 28, 2015 Adjust font size:

The local currency swap between Argentina and China has helped the South American country to lower its public debt, said a specialized report Thursday.

Argentina and China signed a currency swap agreement during Chinese President Xi Jinping's state visit in 2014 when the two governments approved 20 agreements, worth a total of around 11 billion U.S. dollars.

The deals are believed to have helped Argentina shed some of its debt burden.

"The U.S. dollars obtained in recent months helped the government make corrections to the exchange rate and reduce the growing deficit coming from the interchange of goods and services," according to the report of Argentinean consultancy Ecolatina.

The next president-elect will benefit from favorable conditions with respect to public debt, it said.

Argentina's public debt will have risen to 240 billion dollars by December 2015, 18.3 billion higher than that at the end of 2014, according to the report.

Last year alone, Argentina's national public debt stood at 221.7 billion dollars, equivalent to 43 percent of its gross domestic product (GDP), but foreign debt only accounted for 13 percent of the GDP.

The country has therefore come a long way since 2001 when its national public debt matched 54 percent of the GDP, with foreign debt 32 percent of the GDP.

The currency swap between Buenos Aires and Beijing had "saved 2015" for the South American country, and "isolated it from international economic reversals," another Argentinean consultancy Econometrica said last week. Endi