On Wednesday, the Argentine government announced that Argentina would start paying for Chinese imports in yuan instead of dollars, in a measure aimed at relieving the country’s dwindling dollar reserves.

A government statement said that in April, it aims to have about $1 billion in Chinese imports paid in yuan instead of dollars, after which about $790 million in monthly imports will be paid in yuan.

The decision aims to facilitate the flow of dollars abroad, Argentine Economy Minister Sergio Massa said, during an event following a meeting with the Chinese ambassador, Zhou Xiaoli, as well as with companies from various sectors.

The decision comes as the South American country grapples with critical levels in its dollar reserves amid a sharp drop in agricultural exports due to a historic drought, as well as political uncertainty ahead of elections this year.

In November last year, Argentina expanded currency swaps with China by $5 billion, in an effort to boost Argentina’s international reserves.

Massa added that the agreement would allow Argentina to “work out the possibility” of increasing the rate of imports, with yuan-denominated import orders approved in 90 days instead of the standard 180 days.

(Reporting by Walter Bianchi). Editing by Sarah Moreland

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