According to the information that was published on the social network X (formerly Twitter) on August 23 via the @finanzasargy account, The Brazilian government has made an interesting proposal to Argentina to change the landscape of bilateral trade.
🇧🇷🇦🇷 Brazil proposed to Argentina to trade in the yuan and eliminate the dollar in bilateral relations, to avoid dependence on the scarce dollar reserves of the BCRA and to ensure trade kept flowing
– Argy Finance 🇦🇷 (@FinanzasArgy) August 23, 2023
According to Brazilian Economy Minister Fernando Haddad, it is proposed that the value of Brazilian exports to Argentina be paid in yuan instead of dollars.. This initiative aims Reducing dependence on dollar reserves Argentine Central Bank and maintain trade flow between the two countries.
The proposal includes direct conversion of the yuan into the real through the Bank of Brazil in London, amounting to $140 million.. This would provide Brazilian exporters with greater security in their operations and reduce the risk of Argentine non-compliance. Haddad stressed that this approach guarantees a flow of sales with strong protection for exporters and for the Brazilian national treasury.
This initiative comes in a context in which the drought in Argentina affected foreign exchange income from the sale of grainThis prompted the need to find solutions to facilitate payments for Brazilian exporting companies.
Despite previous negotiations between the leaders of the two countries, this new proposal appears to effectively address concerns about the availability of dollars in Argentina.
President Alberto Fernandez and his Brazilian counterpart Luiz Inácio Lula da Silva earlier discussed financing Brazilian exports to Argentina. but, Brazil had asked for greater guarantees due to a shortage of dollars in Argentina. Although no other ideas were presented, this proposal is presented as a practical option to boost trade between the two countries..
President Luiz Inácio Lula da Silva has described Brazil’s proposal as “Quiet and practical“. is in line with your A vision to promote the policy of getting rid of the dollar to the world economy and Encourage the use of local currencies in commercial transactions between the BRICS countries. As the talks develop and the implications are assessed, economic analysts will be watching how this proposal could affect trade and financial stability in the region.
This proposal is another example of efforts by countries around the world to move away from the dollar’s monopoly in the use of international transactions. Argentina, which suffers from the complexities of international reserves, in addition to strong debts to the International Monetary Fund and China, is obliged to guarantee that imports reach Buenos Aires, and for this reason, Brazil’s position of guaranteeing payment for exports suggested the joint use of funds. Chinese currency.
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