Argentina to use yuan with China to save dollars

Argentina is seeking a way to restrict the exit of dollars from their national reserves, switching to use the yuan when trading with China and driving up parallel rates. The cost of the illegal dollar rate in Argentina increased almost by a fifth since last week, and on Wednesday stands at 475 pesos per dollar.

Searching to maintain a reserve of dollars, the Argentine government on Wednesday announced it would stop using the US currency to pay imports from China and instead would switch to the yuan.

Strict controls set by the government mean that access to the official foreign exchange market is extremely limited, so parallel rates have flourished. Analysts agree the rapid depreciation of the peso is in part due to the surprisingly high monthly inflation of 7.7% in March, which took the annual rate to a whopping 104%.