Skip to main content

Brazil and Argentina will discuss for common currency.

South Amer­ica’s two biggest eco­nom­ies will dis­cuss the plan at a sum­mit in Buenos Aires this week

South America

and will invite other Latin Amer­ican nations to join. The ini­tial focus will be on how a new cur­rency, which Brazil sug­gests call­ing the «sur», could boost regional trade and reduce reli­ance on the US dol­lar, offi­cials told the Fin­an­cial Times. « a decision to start study­ing the para­met­ers needed for a com­mon cur­rency, which includes everything from fiscal issues to the size of the eco­nomy and the role of cent­ral banks,» Argen­tina’s eco­nomy min­is­ter Ser­gio Massa told the Fin­an­cial Times. « it’s the first step on a long road which Latin Amer­ica must travel».

Ini­tially a bilat­eral project, the ini­ti­at­ive would be offered to other nations in Latin Amer­ica. A cur­rency union that covered all of Latin Amer­ica would rep­res­ent about 5 per cent of global GDP, the FT estim­ates. The world’s largest cur­rency association, the euro, encom­passes back 14 per cent of global GDP when meas­ured in dol­lar terms. Other cur­rency blocs include the CFA franc, which is used by some African coun­tries and pegged to the euro, and the East Carib­bean dol­lar.

Trade is flour­ish­ing between Brazil and Argen­tina, reach­ing $26.4bn in the first 11 months of last year, up nearly 21 per cent in the same period in 2021. The attrac­tions of a new com­mon cur­rency are most obvi­ous for Argen­tina, where annual infla­tion is approach­ing 100 per cent as the cent­ral bank prints money to fund spend­ing. Argen­tina has been largely cut off from inter­na­tional debt mar­kets since its 2020 default and still owes more than $40bn to the IMF from a 2018 bail­out. 

www.sba.tax

Labels:

Comments

  1. Alberto23 January 2023 at 11:59

    It's a good idea, in theory. Let's see how they plan to implement it and how it is actually put in place.

    ReplyDelete
    Replies
    1. Daniel23 January 2023 at 13:01

      I don't think it's the best idea. They need to assess the good and the bad about such a move. Otherwise this could be a similar case to that of Brexit, in a way.

      Delete
  2. Linda23 January 2023 at 13:27

    Little known fact: Gaddafi tried to implement something like this in Africa. Not many people know this. He didn't succeed but if he did I wonder if France would have been happy.

    ReplyDelete

Post a Comment

Cloud Bookkeeping

US FED rate rise.

  The US Federal Reserve officials have indicated that they plan to resume increasing interest rates to control inflation in the world's biggest economy. During the June meeting, the Federal Open Market Committee reached a consensus to keep interest rates stable for the time being to evaluate whether further tightening of policy would be necessary. However, the majority of the committee anticipates that additional rate increases will be required in the future. The minutes of the meeting have recently been made public. According to the minutes, most participants believed maintaining the federal funds rate at 5 to 5.25 per cent was appropriate or acceptable, despite some individuals wanting to raise the acceleration due to slow progress in cooling inflation. Although Fed forecasts predicted a mild recession starting later in the year, policymakers faced challenges in interpreting data that showed a tight job market and only slight improvements in inflation. Additionally, officials gr...
Post a Comment
Read more

EU business slide.

  S&P Global’s flash eurozone composite purchasing managers’ index, a key gauge of business conditions for the manufacturing and services sector, fell 1 point to 47.1, figures showed yesterday. That is its lowest level since November 2020 and the fourth consecutive month below the crucial 50 mark separating growth from contraction. One of the few bright spots in the survey was that companies in all sectors reported a slight easing of cost pressures, price growth and supply chain constraints. However, prices charged for goods and services still rose at the sixth fastest rate since such data started in 2002. Jobs growth increased marginally from October but remained low compared with the past 18 months. Following a few months of falling price pressure in manufacturing and services, the October print shows an overall stabilisation said Jens Eisenschmidt, chief European economist at Morgan Stanley. However, German businesses, at the hub of Europe’s energy crisis, reported that manu...
1 comment
Read more

India- UK trade deal.

  According to India's top trade official, talks with the UK regarding a trade agreement are progressing well, despite obstacles related to temporary work visas and the opening up industries like automotive and spirits. The Commerce and Industry Minister, Piyush Goyal, explained that India is seeking transition periods or greater market access in specific sectors due to its economy, which is slightly larger than the UK's and expected to outgrow it in the coming decades. If a trade deal is reached, it would be one of the most significant agreements for Britain since leaving the EU, and it would also be necessary for India, which surpassed the UK as the fifth-largest economy last year. Goyal stated that India aims to increase its economy from $3.5tn to $35tn by 2047, the country's centenary of independence. According to officials and diplomats in India, talks about a proposed trade deal may be finished by early September, just in time for the G20 summit in New Delhi. Nigel Hu...
Post a Comment
Read more