Brazil, Argentina Discuss Common Currency: Project Could Rope In Other LatAm Nations Later

Brazilian President Luiz Inacio Lula da Silva and Argentine leader Alberto Fernandez have reportedly said the two countries aim for greater economic integration that includes the development of a common currency.

"We intend to overcome the barriers to our exchanges, simplify and modernize the rules and encourage the use of local currencies," the two leaders said, according to a Reuters report that cited a jointly written article published on the Argentine website Perfil.

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"We also decided to advance discussions on a common South American currency that can be used for both financial and commercial flows, reducing costs operations and our external vulnerability," the article said.

Common Currency: Last year, Fernando Haddad and Gabriel Galipolo, now Brazil's finance minister and his executive secretary, respectively, had written an article about the idea of a common currency which was mentioned by Lula during the campaign.

The Financial Times also reported that both South American countries will announce they are commencing preparatory work on a common currency, a move that could eventually create the world’s second-largest currency bloc.

The initial focus will be on how a new currency, which Brazil suggests calling the “sur” (south), could jack up regional trade and reduce reliance on the dollar, the report stated, citing officials.

The project, initially a bilateral one, would be offered to other nations in Latin America. 

“It is Argentina and Brazil inviting the rest of the region,” Argentina’s economy minister Sergio Massa told the Financial Times. “It would be a study of mechanisms for trade integration,” he added.

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