China Puts a Pause on Argentina's $6.5B Crypto Swap: A BRICS Update

• Argentina's Currency Swap Agreement with China Suspended After BRICS Rejection
• BRICS Expansion and Argentina's Response
• Reactions to the Suspension
• Argentina's Economic Shift

Argentina's Currency Swap Agreement with China Suspended After BRICS Rejection

Argentina's $6.5 billion currency swap deal with China is on hold following the country's refusal to participate in a proposed expansion of the BRICS economic alliance. According to Yahoo, the suspension will be effective until Argentina's President, Javier Milei, demonstrates a readiness to engage with China.

Argentina was among six nations invited to be part of the alliance's maiden expansion. Despite the country's challenging economic climate, the economic partnership with BRICS was seen as valuable. However, a change in leadership following a presidential election resulted in Argentina turning down the offer.

BRICS Expansion and Argentina's Response

The BRICS economic alliance, during its 2023 Annual Summit, officially announced an expansion plan. Invitations were extended to Saudi Arabia, Argentina, the United Arab Emirates (UAE), Iran, Egypt, and Ethiopia. However, as of January 1st, 2024, only five of these nations are expected to join the alliance.

Following Argentina's refusal of the BRICS invitation, China suspended its $6.5 billion currency swap agreement with the country. The decision came alongside the emergence of a new regime in Argentina, a regime that has voiced its perception of the BRICS association as having little value, hence its decision not to join them.

Reactions to the Suspension

While no Chinese official has publicly commented on these developments, Wang Wenbin, the Chinese Foreign Ministry Spokesperson, has discussed the bilateral relationship between both countries. He stated that China is committed to cooperatively working with Argentina on the basis of equality and mutual benefit.

Argentina's Economic Shift

Since Javier Milei took office, Argentina has shown an inclination towards dollarizing its economy. As it navigates a progressively tough financial scenario, the country has been consistently leaning towards the West. This stance has often put them at odds with BRICS policies, which tend to prioritize the empowerment of developing economies over Western dominance.

Edited by Jonathan Stoker