In a historic decision, Brazil and Argentina have announced that they will begin preparations for a common currency next week. This was reported by the “Financial Times” on Sunday, and Brazil wants to call the new money “Sur” (South).
The plan, to be discussed at a summit in Buenos Aires, focuses on how the new currency can boost regional trade and reduce dependence on the US dollar, according to the FT, citing officials.
“There will be a decision to start studying the parameters needed for a common currency, covering everything from fiscal issues to the size of the economy and the role of central banks,” Argentina’s Economy Minister Sergio Massa told the ‘FT’.
Experts expect economic strengthening and a move away from the US dollar
The announcement that the two countries will adopt a common currency has created excitement in the region and worldwide. Experts predict that the new currency will strengthen trade and economic integration between the two countries and reduce dependence on the US and other currencies.
The plan’s details, including the timetable for introducing the new currency, will be announced in the coming days. One thing is sure, however: the decision by Brazil and Argentina to introduce a common currency will change the region forever.
The report says that the initiative, launched initially as a bilateral project, will be extended to other Latin American countries later. This expansion of the common currency could lead to greater economic integration and cooperation in the region.
An official announcement is expected during Brazilian President Luiz Inacio Lula da Silva’s visit to Argentina, which begins on Sunday evening. The Brazilian President and the Argentine President, Alberto Fernández, are expected to announce the plans for the common currency during a press conference on Monday.
Impact on trade and economic integration in the region
Politicians from both countries already discussed the idea of a common currency in 2019. Still, they met resistance from the Brazilian central bank at the time. However, it is still being determined whether this resistance exists and how it could get in the way of the plans. The developments are being watched with interest worldwide, as the creation of a common currency in Latin America will be of historic proportions. Experts predict that the new currency will strengthen regional trade and economic integration and reduce dependence on other currencies.