President Alberto Fernández and his counterpart Luiz Inácio Lula da Silva analyzed the alternatives to provide financial aid to Argentina, in a context of scarce reserves.
President Alberto Fernández and his partner Luiz Inácio Lula da Silva analyzed the alternatives to provide financial aid to Argentinain a context of shortage of reserves. In addition to a financing line, a scheme similar to the one announced last week with China was also agreed.
Sources from the Ministry of Economy assured that a credit system will be established with the SIRA system, but in reais. The business expectation is for what can be announced based on financing.
As confirmed from Brazil, it will seek to give credits to more than 200 Brazilian companies so that they can export to Argentina. he would be a compensatory mechanism in reais and pesos, so as not to use the dollar. What remains to be defined are the compensation terms. In January, Haddad and Massa had told the businessmen that they wanted it to be 366 days, that is, more than a year, in order to function as “bridge” until the end of the drought and the Néstor Kirchner gas pipeline is in operation. The financing of imports will be for this year, they clarify close to Massa.
In addition, they add that they will seek to have a “system of guarantees on future flows from Argentina of incremental exports.” From Brazil, the economic team explains that it will be a “scheme like the one announced with China.” However, the difference is that there the swap is used to import directly with the use of yuan. The case of Brazil is different due to the autonomy of the Central Bank, so it will be sought that there are other banks that finance Brazilian companies, such as the BRICS bankchaired by the former president of Brazil, Dilma Rousseff.
In charge of finishing outlining the implementation will be Massa’s economic team and Haddad’s. Lula’s economy minister will travel to Argentina next week, Ámbito learned. The call of Brazilian exporters and Argentine importers is expected at the FIESP meeting in Sao Paulo to advance.
Trade deficit
Sources from the embassy in Brazil assured that in this way trade will gradually decompress, since Argentina will not have to have reserves to make imports of more than US$1,000 million per month. Despite the “political affinity” between Alberto Fernández and Lula da Silva, in the Brazilian Ministry of Finance they emphasize that the measure benefits large industries in Brazil, which in recent years have lost ground to China in their exports for about US$6 ,000 million not being able to finance them.
In addition, the relief to Argentina falls on its delicate situation of reserves, in a context of historical drought. Although the commercial exchange between Argentina and Brazil is growing, this is due to a strong rise in imports. ANDn the first four months of 2023, commerce accumulates a negative balance for Argentina of US$1,775 million, according to sources from the Argentine Chamber of Commerce (CAC). exports grew 7%iinterannual in the accumulated January-April, while imports from Brazil climbed 26.2% in the same period, due to the purchase of soybeans and vehicles. Only in the last month of April, the trade balance for Argentina showed a deficit of US$776 million.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
