• President of Brazil Luis Inacio Lula Da Silva clarified the scope and reach of the common currency that Brazil and Argentina are studying to issue in Latam.
• Lula Da Silva stated the currency would be used to settle cross-border payments between the two countries and also countries from BRICS and Mercosur.
• Fernando Haddad, minister of economy of Brazil, offered more insight into the objectives of the two countries, explaining that they are trying to find a solution to reduce dependence on the U.S. dollar.
Brazil and Argentina are exploring the possibility of creating a common currency in Latin America, which would be used to facilitate settlements between countries such as the BRICS and Mercosur. President of Brazil, Luis Inacio Lula Da Silva, recently clarified the scope and reach of the proposed currency during his arrival in Buenos Aires for the CELAC summit of chiefs of state.
Lula Da Silva stated that he believed the currency would be used to settle cross-border payments between the two countries and also countries from BRICS and Mercosur. He further noted his preference for international trading transactions to be settled in currencies native to their countries, to reduce dependence on the U.S. dollar.
Fernando Haddad, the Brazilian Minister of Economy, offered more insight into the objectives of the two countries, explaining that they are trying to find a solution that would help grow trade and reduce dependence on the U.S. dollar. Haddad noted that the foreign currency is a major issue for trade, and that a common currency could help address this issue.
President of Argentina Alberto Fernandez also referred to the hypothetical currency in the same terms that Lula did, emphasizing that they are still unsure of how the currency would be implemented. He noted that they are still in the process of discussing the details, and that they will need to consider the implications of such a currency on the financial systems of the two countries.
The proposed common currency is a significant step towards closer economic integration between Brazil and Argentina, as well as the rest of the Latin American countries. As the two countries work to develop the details, it remains to be seen how the currency will impact the region’s financial systems and trading relationships.