Currencies Swap Agreement Between Brazil and Argentina Postponed to August

Argentinean peso
Brazil and Argentina postponed the signing of a US$ 1.8 billion swap agreement that was supposed to promote bilateral trade amid the global financial crisis. Reasons for the delay were not revealed but the event was rescheduled for August 3.

The agreement was to be signed during the Mercosur two-day presidential summit in Paraguay.

Brazilian officers suggested delaying the signing since Argentina's new Economy Minister Amado Boudou took office only a few days ago. Boudou had a bad start at the summit: he arrived late to the ministerial meeting in Asuncion and contrary to all his peers was unable to come up with estimates of the Argentine performance for the rest of the year.

In Buenos Aires press reports indicated that it was necessary "to recalculate the swap involved to avoid confusion." The agreement at Central banks' level included the exchange of credit lines up to 3.5 billion Brazilian Reais or its equivalent of 6.5 billion Argentine pesos, in the range of US$ 1.8 billion.

The agreement would have an initial trial period of six months and future amendments would be determined by presidents of both central banks. Argentina's foreign exchange reserves stand at US$ 46 billion and Brazil's US$ 208 billion.

Brazil is Argentina's main trade partner. Both countries have seen the volume of foreign trade drop as a consequence of the global crisis and are interested in using local currencies to further stimulate bilateral trade.

However in spite of the "strategic alliance" between the two leading economies of South America and senior members of Mercosur, Brazil has threatened to take Argentina to the WTO for imposing non tariff barriers to trade. In an effort to overcome the situation both countries have encouraged private sector negotiations to find a way out to the dispute.

Mercopress

Tags:

Ads

You May Also Like

Brazil Sends Troops to Amazon to Protect Rural Workers on Loggers’ Death List

This past weekend, Brazil’s  National Public Security Force agents escorted a group of nine ...

Brazil’s Development Bank Has US$ 45 Bi to Lend. 24% More Than Last Year

Brazil's BNDES (Brazilian National Development Bank) intends to make available 80 billion Brazilian reais ...

Cultural Potpourri

It is so rare to see Portuguese-language poems translated into English and published in ...

Brazil Takes Works by 25 Classy Artisans to German Museum

Brazilian handicraft won a highlighted spot in the country of the World Cup between ...

40% of Brazilian Adults Are Obese

In Brazil, like many Third World countries today, obesity has become a bigger problem ...

Drought, Frost and Old Fields Cut Brazil’s Sugarcane Harvest by 6%

Brazil’s sugarcane grower association União da Indústria da Cana-de-Açúcar (Única) has lowered its estimate ...

Another Scary Day in Brazil: Markets Down 11%

Brazilian shares plummeted more than 10% on Wednesday, October 15, triggering a trading halt, ...

World Economic Forum Holds Meeting on LatAm in Brazil

The World Economic Forum (WEF) is going to hold for the first time a ...

Brazil expands corn production

US Ethanol Production Leads Brazil to Double Corn Exports

Brazil should double foreign sales of corn in this crop to eight million tons. ...

Brazil’s Impending Investment Grade Brings Flood of Foreign Capital

Entrance of Foreign Direct Investment (FDI) into Brazil is rising significantly. In the first ...