Brazil and Argentina will have a common currency

Both governments are preparing to launch common currency projects that can coexist in both countries

The governments of Brazil and Argentina will announce next week preparations to launch a common currency project that could turn the two countries, the two largest South American economies, into the world’s second-largest currency bloc.

The initial intention is that this new currency, whose name Brazil proposes to be “El Sur”, promotes regional trade and reduces the impact of the dollar. In principle, both countries contemplate a period of simultaneous trade with the Brazilian real and the Argentine peso.

“We will announce the 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“, announced Argentina’s Economy Minister Sergio Massa.

“I do not want to create false expectations: it is the first step in a long road that Latin America must travel”, added the minister, who said that Argentina and Brazil will invite other countries in the region to join this project, before recalling that in Europe it took 35 years to create the euro.

Brazil and Argentina have been discussing a common currency for years, but the talks have never come to fruition due to opposition from the Central Bank of Brazil. Under the government of the left in both countries, experts understand, in relation to Lula and the Argentine president, Alberto Fernández, there is greater political support for the project.

K.Tovar

Source: ElPais

(Reference image source: file)

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