The U.S. home appliance brand Whirlpool is finding it hard to sustain business in Argentina and now depends on the Chinese Yuan for survival. Whirlpool opened a plant in Argentina in October 2022 with an investment of $52 million. The opening of the factory coincided with Argentina running short of the U.S. dollar leading to a nationwide financial crisis. The U.S. dollar remains so scarce in Argentina that leading companies are using the BRICS alliance’s most favored currency, the Chinese Yuan to stay afloat.
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Argentina’s Central Bank’s dollar reserves are at their lowest since 2016 and businesses are finding it hard to initiate transactions. Therefore, Whirlpool is ready to pay for imports and exports using the Chinese Yuan and not the U.S. dollar in Argentina.
Around 500 multinational corporations urged the Argentinian government to enable transactions with the Chinese Yuan. The government paid heed to the demands and allowed banks to open accounts with the Chinese Yuan currency. The move makes it easier to conduct business and settle cross-border payments despite the U.S. dollar scarcity.
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BRICS: The Rise of the Chinese Yuan
A decline in the U.S. dollar reserves paves the way for the Chinese Yuan to gain strength in the global markets. The development coincides with the BRICS alliance moving ahead to launch a new currency next month to challenge the dollar. The de-dollarization efforts as paying off as BRICS may convince other developing countries to ditch the greenback.
Also Read: 41 Countries Ready To Accept BRICS Currency a Month Before Summit
BRICS is an acronym for Brazil, Russia, India, China, and South Africa. The bloc could soon expand to BRICS+ as many more nations are expected to join the alliance. Saudi Arabia, Argentina, and the UAE will most likely be inducted in August. Read here to know how many U.S. sectors could be affected if BRICS launch their new currency next month.