“We decided to advance the discussions on a common South American currency that can be used for both financial and commercial flows.reducing operating costs and reducing our external vulnerability”, indicates a statement from the Government of Alberto Fernández, on the occasion of the visit of Lula da Silva.
The plan would be discussed during Lula’s visit to Argentina. Both presidents will meet to sign a series of agreements on different topics, which includes the possibility of extending the common currency to other countries, according to official sources.
“There will be a decision to start studying the necessary parameters for a common currency, which includes everything from fiscal issues to the size of the economy and the role of central banks,” Argentine Economy Minister Sergio Massa told the Financial newspaper. Times.
According to the minister, it would be a study of commercial integration mechanisms, although he pointed out that he did not want to “create false expectations” because it is the first step on a long road that Latin America must travel.
A long-term option due to inflation
“None of what he says are short-term measures,” The director of the consultancy Abeceb and Minister of Production during the administration of Mauricio Macri (2015-2019), Dante Sica, told EFE.
Sica recalled that during that mandate progress had been made on a letter of intent between the two countries to begin studying the possibility of having a common currency through a program with the Inter-American Development Bank, and that it was the Brazilian central bank that stopped the initiative. .
According to Sica, “the resistance of the Brazilian central bank is strong” because Argentina has inflation of 94.8% in 2022 and the private sector projects 98.4% in 2023, according to the expectations surveyed by the Argentine Central Bank, and “It does not have a consistent program to lower long-term inflation.”
“The currency as a whole is built with a high level of confidence, established macroeconomic policies, and similar inflation ranges,” added Sica, since in Brazil an inflation of 4.8% is projected in 2023.
Fact:
Brazil is Argentina’s main trading partner, which closed the commercial relationship with a deficit of US$2.25 billion in 2022, although less than the average of US$3.5 billion recorded between 2004 and 2018, according to Abeceb.
With information from EFE.
Source: Larepublica
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