Brazil and Argentina Plan for a Latin American Common Currency

Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • #51971
    MoneyNeverSleeps
    Participant

    Two of Latin America’s largest economies Brazil and Argentina with eyes to strength in numbers along the lines of the Euro, plan a common currency to
    [See the full post at: Brazil and Argentina Plan for a Latin American Common Currency]

    #52016
    TradersCom
    Keymaster

    Brazil to Finance Argentine Importers in Bid to Boost Trade Ties

    Brazil emulating China, now Argentina’s top trading partner
    Countries consider common exchange unit, not single currency

    January 23, 2023 at 10:16 AM

    Brazil and Argentina unveiled plans to boost commercial ties through a program to finance Argentine importers and a long-shot idea of a common currency to replace the dollar in bilateral trade.

    The plans were announced Monday during a trip by President Luiz Inacio Lula da Silva to Buenos Aires, where he met with his counterpart Alberto Fernandez before a summit of Latin American leaders scheduled for the following day.

    “Brazil not only can, but needs to help all of its partners within the economic possibilities of our country,” Lula told journalists after the meeting, adding that his government will also help finance the construction of a gas pipeline in Argentina.

    Loans to Argentine companies will be given by public and private banks in Brazil and covered by guarantees from both governments, according to a memorandum of understanding signed by Fernando Haddad and Sergio Massa, the economy chiefs for Brazil and Argentina, respectively. Argentine companies will also have to provide liquid assets, such as commodities contracts, as collateral before the money is released.

    Brazil lost to China the position of Argentina’s top trading partner in 2019 as the Asian nation implemented the same kind of export financing now being discussed by the South American nations. In 2022, Brazil had a trade surplus of $2.2 billion with its southern neighbor.

    The amount of financing to be offered by Brazil hasn’t been defined yet, a person familiar with the matter said, and will depend on demand by Argentine companies and their ability to offer collateral.
    Common Currency

    Another plan to boost bilateral trading is the creation of a common unit of exchange to avoid the dollar — an idea Lula and his counterpart Alberto Fernandez have described as a “common currency” and which both countries have tried and failed to implement for decades.

    https://www.bloomberg.com/news/articles/2023-01-23/brazil-seeks-to-finance-argentine-importers-emulating-china?srnd=premium&leadSource=uverify%20wall

Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.