MercoPress. South Atlantic News Agency

Argentina's race against time: Economy Minister seeks Chinese support to stay afloat

Economy Minister Massa and Deputy Máximo Kirchner are traveling aboard the ARG-01 aircraft

Argentina's Economy Minister Sergio Massa is due in China Tuesday, in a desperate bid to secure much-needed dollars for the government's survival and bolster its chances in the upcoming presidential elections. President Alberto Fernández, who recently announced that he would not seek re-election, has taken a backseat, allowing Massa to spearhead this crucial mission.

Departing on Sunday aboard the new ARG-01 presidential aircraft, Massa is accompanied by Deputy Máximo Kirchner and a delegation of prominent businessmen. Their primary objective is to attend a meeting of the New Development Bank, a financial institution led by former Brazilian President Dilma Rousseff, in Shanghai.

Following their engagement in Shanghai, Massa and his entourage are scheduled to continue their discussions in Beijing. The Argentine government aims to negotiate an expansion of the currency swap agreement previously established with Beijing. Such a move would bolster the Central Bank's reserves, which recently dropped below the critical threshold of USD 32 billion due to repayments to the International Monetary Fund (IMF).

These repayments exceed the disbursements provided by the global financial organization. Notably, Argentina must fulfill obligations amounting to more than USD 2.682 billion to the IMF between June 21 and 22.

While a portion of this debt could be covered by utilizing IMF Special Drawing Rights (SDRs) acquired in March, the remaining amount must be sourced from the Central Bank of the Argentine Republic's (BCRA) reserves or borrowed from alternative lenders. Even if Argentina successfully manages to address the initial debt maturity and anticipate subsequent disbursements throughout the second half of the year, any relief provided to the country's reserves would be short-lived. Argentina faces recurring maturities in the coming months until year-end, posing a persistent challenge to its economic stability.

The significance of Massa's visit to China cannot be overstated, as it represents a crucial lifeline for Argentina's struggling economy. By seeking to expand the currency swap agreement with China, the Argentine government hopes to secure additional funds that will fortify its reserves and alleviate the mounting pressure caused by looming debt repayments. The outcome of Massa's negotiations in China could have far-reaching implications for the country's economic future and political landscape, especially as the presidential elections draw near.