Argentina’s Central Bank Introduces Yuan-MEP as Dollar Alternative on Stock Market

The Central Bank of Argentina has enabled the yuan-MEP as an alternative to buying dollars on the stock market. This means that individuals can buy bonds in pesos and make yuan as an alternative to the MEP dollar. The decision to enable the yuan-MEP comes as Argentina battles critical levels in its dollar reserves amid a sharp drop in agricultural exports caused by a historic drought, as well as political uncertainty ahead of elections this year. In April, Argentina announced that it would pay around $1 billion of Chinese imports in yuan instead of dollars and thereafter around $790 million of monthly imports will be paid in yuan.

The decision aims to ease the outflow of dollars. Argentina’s shift to using more yuan will likely be seen as a win for China, as it seeks to elevate its currency’s usage on the world stage and rival or supplant the dollar in global trade.