2023-08-24 04:05:00
Hoy 01:05
The government of Brazil proposed to Argentina a plan that would use the yuan to guarantee export payments in order to avoid the consequences of the serious shortage of money in the neighboring country and ensure that trade maintains its flow, according to the Brazilian Finance Minister, fernando haddad.
The President’s Administration Luiz Inacio Lula da Silva has sought ways to help Argentina amid a worsening economic crisis in the neighboring country, while also trying to ensure that Brazilian exporters receive payments for sales to the third largest trading partner of Brazil.
“For Brazilian exporters it is a good thing; it will be good news if Argentina accepts”, Haddad told reporters in South Africa on Wednesday, where he is participating in the summit of the BRICS countries. “Because they can have a flow of sales of their products with 100% guarantee.”
The idea is to initially guarantee between $100 million and $140 million in trade through an exchange made by Banco do Brasil SA, which would convert yuan to reais to pay exportersHadad said. The government wants to test the plan before deciding whether to extend it.
Brazil is still waiting for a response from the President’s government Alberto FernandezHaddad noted.
The economic crisis in Argentina
Rampant inflation and a record drought have battered Argentina’s economy this year, pushing it to the brink of recession.
Faced with a shortage of foreign reserves, in recent months Argentina has turned to Chinese swap lines to help make loan payments to the International Monetary Fund. The use of the yuan has also risen to record levels amid difficulties for companies to find dollars to finance imports and operations.
Haddad added that the use of the yuan will ensure that there is no “risk of default” on any payment.
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