• Brazil and Argentina are preparing to launch a common currency in order to strengthen their economic relationship and reduce reliance on the US dollar.
• The idea of a common currency was first introduced by Fernando Haddad, Brazil’s current finance minister, and his executive secretary Gabriel Galipolo.
• The idea of a common currency was used by Brazilian President Luiz Inacio Lula da Silva in his campaigns, and the relationship between Lula and Argentina’s President Alberto Fernandez is expected to strengthen the two major economic hubs.
The Federative Republic of Brazil, the largest country in South America and Latin America, is set to launch a common currency with its largest international trade partner the Argentine Republic. Under the leadership of President Lula, Brazil rejoined the Community of Latin American and Caribbean States (CELAC) which the country left in 2019 following orders from Bolsonaro.
The idea of a common currency was first mentioned by Fernando Haddad and Gabriel Galipolo, Brazil’s current finance minister and his executive secretary respectively. The idea was used by Brazilian President Luiz Inacio Lula da Silva in his campaigns and it is expected that the relationship between Lula and Argentina’s President Alberto Fernandez will enable the two major economic hubs to strengthen their economic relationship and reduce reliance on the US dollar.
The intention for this move is to overcome the barriers to exchanges, simplify and modernize trading processes and make the two countries’ economies more competitive in terms of investments and exports. As such, it is expected that the two countries will benefit from the common currency and become more integrated, thereby allowing them to access more opportunities and resources.
In order to ensure that the common currency is successful, both countries must agree on the implementation of a common monetary policy and exchange rate. This will ensure that both countries are able to maintain economic stability, and benefit from the advantages of the common currency. Furthermore, measures must also be taken to ensure that the common currency is protected from external shocks, such as the value of the US dollar.
To conclude, the introduction of a common currency between Brazil and Argentina is an important step in creating a more economically integrated and competitive region. It is expected that the common currency will reduce reliance on the US dollar, and help both countries to benefit from increased trading and investment opportunities. Furthermore, the common currency will provide both countries with the opportunity to access more resources and opportunities, and create a more stable and secure economic environment.