BUENOS AIRES, Jan 22 (Reuters) – Brazil and Argentina aim for further economic integration, including the development of a common currency, Brazilian President Luiz Inácio Lula da Silva and Argentine leader Alberto Fernández said in a joint article. that they wrote
“We intend to overcome the barriers to our exchanges, simplify and modernize the rules and encourage the use of local currencies,” says the text published on the Argentine website Perfil.
“We also decided to advance discussions on a common South American currency that can be used for both financial and trade flows, reducing the costs of operations and our external vulnerability,” the article says.
The idea of a common currency was originally raised in an article written last year by Fernando Haddad and Gabriel Galipolo, now Brazil’s finance minister and its executive secretary, respectively, and was mentioned by Lula during the campaign.
Lula chose Argentina for his maiden international trip since taking office, following the tradition of first visiting Brazil’s largest trading partner in the region. That follows four years of strained relations under right-wing former Brazilian President Jair Bolsonaro.
Lula’s trip to neighboring Argentina also marks the return of Brazil to the Community of Latin American and Caribbean States (CELAC), which Brazil left in 2019 by order of Bolsonaro, who refused to participate in the regional group due to the presence of Cuba. and Venezuela. .
Both presidents emphasized the need for a good relationship between Argentina and Brazil to strengthen regional integration, according to the article.
The presidents also emphasized strengthening the Mercosur trade bloc, which includes Argentina, Brazil, Paraguay and Uruguay, and which Brazilian Finance Minister Haddad recently lamented has been abandoned in recent years.
“Together with our partners, we want Mercosur to constitute a platform for our effective integration into the world, through the joint negotiation of balanced trade agreements that respond to our strategic development objectives,” said both presidents.
Earlier in the day, the Financial Times reported neighboring nations will announce this week that they are beginning preparatory work for a common currency.
The plan, to be discussed at a summit in Buenos Aires this week, will focus on how a new currency Brazil suggests calling the “south” could boost regional trade and reduce reliance on the US dollar, the FT reported citing officials. .
Politicians from both countries already discussed the idea in 2019, but were met with pushback from Brazil’s central bank at the time.
The initiative, which initially began as a bilateral project, would later be extended to invite other Latin American nations, according to the report, adding that an official announcement was expected during Lula’s visit to Argentina that begins Sunday night.
Reporting by Lisandra Paraguassu; Additional reporting by Jyoti Narayan in Bengaluru; Edited by Tomasz Janowski, Diane Craft, and Chris Reese
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