The Argentine government announced on Wednesday that it will begin using the Chinese yuan to pay for imports from China, rather than the US dollar. This move is intended to alleviate pressure on Argentina's diminishing dollar reserves.

Starting in April, Argentina plans to use yuan to pay for approximately $1 billion worth of Chinese imports, instead of using dollars. Following this initial payment, the government intends to continue using yuan to pay for roughly $790 million in monthly imports from China, according to an official statement.

Sergio Massa, Argentina's Economy Minister, explained that the goal of this decision is to reduce the outflow of US dollars from the country. Massa made the announcement at an event that took place after a meeting with the Chinese ambassador, Zou Xiaoli, and representatives from various industries.

This decision comes at a time when Argentina is grappling with critically low levels of dollar reserves. The country has been facing challenges such as a significant decline in agricultural exports due to a severe drought, as well as political uncertainty in the lead-up to upcoming elections.

In an effort to bolster its international reserves, Argentina increased the size of its currency swap agreement with China by $5 billion in November of the previous year.

Additionally, Massa stated that the new arrangement will provide Argentina with the opportunity to expedite the pace of imports. Import orders denominated in yuan are expected to be authorized within 90 days, which is a shorter time frame compared to the standard 180 days.