China and Argentina have plans afoot to exclude the US dollar in their trade. A special commission, which includes representatives of both sides, not only developed a detailed plan for the transition to the non-dollar settlements, but has already started its practical implementation. Supporters of this idea believe that this would significantly reduce current amounts of dollar settlements after Argentina begins trading in yuan.
The two countries’ governments prepared special orders for the Central Bank of Argentina and the People's Bank of China to launch currency swaps – an agreement that will enable a direct exchange of national currencies at the level of central banks, thus bypassing the dollar exchange.
As soon as this scheme starts to work, Argentine importers will pay for the Chinese goods in yuan getting the renminbi through the central bank, if necessary.
Under the agreement, Argentina will receive the first tranche worth $1 billion before the end of this year. The whole loan totals $11 billion signed by Argentina's government and its Chinese counterpart in July.
