BUENOS AIRES, Jan 22 (Reuters) – Brazil and Argentina are aiming for greater economic integration, including the development of a common currency, Brazilian President Luiz Inacio Lula da Silva and Argentine President Alberto Fernandez said in a joint statement.
“We intend to overcome our exchange barriers, simplify and modernize the rules and encourage the use of the national currency,” said a text published on Argentina’s Perfil website.
“We have also decided to move forward with discussions on a common South American currency that can be used for both financial and commercial flows and reduce operational costs and external vulnerabilities,” the article said.
The idea of a common currency was first floated last year in an article written by Brazil’s current finance minister and his executive secretary, Fernando Haddad, and Gabriel Galipolo, and mentioned by Lula during the election campaign.
Lula chose Argentina for his first international trip since taking office, following the tradition of first visiting Brazil’s largest trading partner in the region. It follows four years of strained relations under the government of Brazil’s right-wing former president Jair Bolsonaro.
Lula’s trip to neighboring Argentina marks Brazil’s return to the Community of Latin American and Caribbean Countries (CELAC), which it left in 2019 at the behest of Bolsonaro, who refused to join the regional group because of Cuba and Venezuela. .
The two presidents emphasized the need for good relations between Argentina and Brazil to strengthen regional integration.
Leaders also emphasized strengthening the Mercosur trade bloc, which includes Argentina, Brazil, Paraguay and Uruguay, lamenting the omission of Brazilian Finance Minister Haddad in recent years.
“We want to work with our partners to make Mercosur a platform for effective integration in the world through the joint negotiation of balanced trade agreements that meet our strategic development goals,” the two presidents said.
Earlier, the Financial Times reported that neighboring countries will announce the start of preparations for a single currency this week.
Plans to be discussed at a summit in Buenos Aires this week will focus on how Brazil’s new currency, to be called the “sur” (south), will boost regional trade and reduce dependence on the dollar, the FT reported, citing officials. .
Politicians from both countries already discussed the idea in 2019, but Brazil’s central bank rejected it at the time.
The initiative, initially a bilateral project, will later be expanded to invite other Latin American countries, the report said, and an official announcement is expected during Lula’s visit to Argentina, which begins Sunday evening.
Reporting by Lisandra Paraguasu; Additional reporting by Jyoti Narayan in Bengaluru; Edited by Tomasz Janowski, Diane Craft and Chris Reese
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