The US dollar has traditionally dominated the invoicing of international trade. But could other currencies one day replace it? This column examines a unique policy experiment in Argentina in 2023. Amid a severe dollar shortage, Argentina expanded its currency swap agreement with the People's Bank of China. The share of imports from China invoiced in renminbi surged rapidly from zero to nearly 50%, displacing the US dollar. Using rich firm-level data on trade and banking, the authors show that lack of dollar availability and connections with a Chinese state-owned bank played a key role in promoting renminbi use.

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14 July 2025

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Vox EU

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https://cepr.org/voxeu/columns/battle-trade-currency-dominance-dollar-vs-renminbi-argentina

This Blog is published under the centre's Trade programme.