The Argentine historian and economist Pablo Gerchunoff once pondered that phrase that almost daily many politicians formulate to economists, with the classic "Tell me, how do you see it?"
"It's an extraordinary question 'how do you see it', it's an honest approach," Gerchunoff graphed.
In February 2009 it was Martín Redrado, economist and then president of the Central Bank, who formulated something similar but to Zhou Xiaochuan, president of the Central Bank of China.
"How do you see the situation?"
It was at a luncheon at the days of the Central Bank of Malaysia for its 50th anniversary and although the theme of the convening conference carried a general and unattractive slogan under the title 'Central banks in the twenty-first century, implications of financial and economic globalization', the talk in the corridors and the one on one were monopolized by another issue: how many reserves each banker had and what was done with the Lehman Brothers crisis (it had erupted months earlier, in September 2008). The government of Barack Obama had started a month ago and a reset of the global financial system was expected.
"We are signing the first currency swap agreements," the Chinese replied to Redrado. We do not want the yuan to appreciate but we do seek to internationalize our currency.
China had arranged six swaps. The Federal Reserve, for its part, had granted credit lines via swaps, for example, with Mexico. Obama's economic team was summoned before taking office by his predecessor, George W. Bush, to organize the rescue of Wall Street banks, a measure that would later be repudiated by the American working middle class affected by the loss of their jobs.
"And why don't you make an exchange with a South American country?" asked Redrado to his colleague.
"Why not?" replied the Chinese.
"What would the package look like?"
—Yuan to finance trade flows.
"I understand," said the Argentine, "it would be important for me to show that money as a backstop for financial facilities in the midst of this crisis.
As they continued to eat lunch and consider alternatives, the Chinese concluded:
"Let's do this. Let's put a clause that reads like this: in case you have to use the yuan and convert it to dollars, you must ask permission from the Central Bank of China. In principle, aid is only for bilateral trade.
Redrado was fine with it. A team from the Central Bank then travelled to China to resolve operational and legal issues. Pedro Rabassa, Juan Basco and María del Carmen Urquiza traveled. Neither the negotiation nor the trips were whitewashed before the bank's board of directors. Then it was necessary to go to London in the framework of a meeting of the G-20 where the agreement was finalized. However, China and Argentina would make the final announcement in April 2009 during a meeting of the Inter-American Bank in Medellin, at which the incorporation of China as a shareholder of the bank would be announced. The swap between the banks included 66 billion yuan, equivalent to $000 billion. They were accounted for outside the reserves.
A month later a pilot test happened. Xiaochuan and Redrado agreed to convert $500 million of the $10 billion.
"We passed the yuan to dollars for 6 months and incorporated them into the market, into the reserves; We don't use them but show them. We canceled in November," Redrado recalls today.
The Argentine economy was going through several unknowns at the beginning of 2009. In addition to the exit from the crisis of Lehman Brothers, the cereals had liquidated US $ 1,000 million less at the beginning of the year, there was a fall in deposits in pesos and the dollar in the future had gone from $ 3.72 in April to $ 4 by the end of the year. It was also entering a campaign for the legislative elections of June 2009, in which Néstor Kirchner would be defeated against Francisco De Narvaez.
To further strengthen the Central Bank's sheet, in May, Brazil contributed US$ 1.500 billion with a currency swap similar to that of China. In total, there were reserves for US $ 46,548 million. And a trade surplus (as of May) of US$6.500 billion.
Almost six years after Redrado's move, the first president of the Central Bank of Mauricio Macri's government, Federico Sturzenegger, called Xiaochuan. It was Dec. 16, 2015 at 3 a.m. They chatted for 15 minutes and agreed to convert yuan to dollars for $3.100 billion. It was one of the steps Sturzenegger took to get out of the trap. He needed to raise as many dollars as possible to bolster reserves, which were at minimum levels. Sturzenegger explained and communicated that "the conversion will increase the liquidity of the reserves with the aim of having a position of greater solidity to exercise its policy of managed floating of the foreign exchange market".
14 years have passed, the swap continues and the same question too: "Tell me, how do you see it?".