INVESTMENT from China to Argentina will clearly become easier if the Chinese yuan becomes an international reserve currency, according to Argentinean expert Gustavo Girado.

    In an interview with Xinhua, the founder of the Asia and Argentina consultancy said that the yuan as a reserve currency would help China and Argentina deepen bilateral commercial and trade relationship and bring new opportunities for the two countries.

    China’s central bank authorized the Industrial and Commercial Bank of China (ICBC) to become a clearing bank for yuan transactions in Argentina on Sept. 18.

    In Girado’s view, this move would be a boon “at a time when Argentina is facing financial restrictions due to economic problems. The country is dependent on foreign currency to continueits development.”

    In an interview last week, Chinese President Xi Jinping said China will push forward market-based reform of its currency regime and make the yuan convertible on the capital account over time.

    Top Chinese officials have been trying to reassure jittery global markets about their policy goals after a run of soft economic data and China’s surprise devaluation of the yuan rattled investors over the past month.

    China is advancing changes to make the yuan convertible on the capital account in a “steady and orderly manner,” Xi said.

    “Reform of the yuan exchange rate formation regime will continue in the direction of market operation,” he said.

    A drop in China’s foreign exchange reserves was “moderate and manageable,” and the level of reserves remains abundant by international standards, Xi said.

    “With improvement to the yuan exchange rate regime and progress in yuan internationalization, it is quite normal that China’s foreign reserves may increase or decrease, and there is no need to overreact to it,” he said.

    Xi reiterated that there is no basis for continued yuan depreciation.

    China’s surprise yuan devaluation last month and a plunge in its stock markets since June have fuelled fears of more shocks to the economy, although Premier Li Keqiang has brushed off concerns it was facing a hard landing.

    Since the devaluation, China has scrambled to keep the yuan steady, running down its foreign exchange reserves by a record US$94 billion in August to US$3.56 trillion.(SD-Xinhua)