Argentina negotiates help with Brazil to take care of dollars

For some time now, the authorities of both countries have been negotiating to obtain an export credit”.

Gabriel Galípolo, executive secretary of the Brazilian Ministry of Finance

Within the framework of the meeting led by Presidents Alberto Fernández and Luis Inacio Lula da Silva, the Minister of Economy of Argentina, Sergio Massa, arrived in Brazil on Tuesday with the mission of strengthening an agreement that brings more relief to the reserves of the Central Bank , after the recent progress to trade without dollars with China.

In a context of tense exchange rate calm, the head of the Palacio de Hacienda together with Leandro Madcur, head of portfolio advisors, and Lisandro Cleri, his chancellor in the direction of the BCRA, must negotiate between four alternatives to strengthen the exchange and investments between both countries.

In a race against time, after having intervened to stop the rise in financial dollars dragged down by the jump in the blue, Massa will discuss hand in hand with his Brazilian counterpart, Fernando Haddad, the vice president, Geraldo Alckmin, and the executive secretary of the Ministry of Finance, Gabriel Galípolo “how to move quickly in a forceful scheme of support for the Argentine economy”, as described by the Brazilian press.

“President Luiz Inácio Lula da Silva (PT) is going to propose financing for Brazilian companies that sell to the country,” he confirmed to the Globo Galípolo group on Monday.

In an interview, the executive secretary of the Ministry of Finance stressed that for some time the authorities of both countries have been negotiating to obtain an “export credit” that could finally have its final push this Tuesday.

“In fact,” he said, “it is financing for Brazilian companies that sell to Argentina and it is these companies that import services and goods from Brazil.”

Agreement Details

During the meeting that will take place in Brasilia, Brazil’s economic chief will propose that these export financing lines be paid directly to Brazilian companies in pesos and then convert them into reais and thus cover the financing debt.

Regarding the details of the agreement that will allow Argentina to maintain a dynamic rhythm in the importation of inputs for the industry, key to sustaining economic activity and, in line, employment, Galípolo revealed that the biggest challenge will be agreeing on convertibility between coins.

By way of questioning the dollarization of trade between two countries that make up Mercosur, he mentioned that “there is a trade between Brazil and Argentina made with the currency of a third country.” Then, although he did not confirm whether the BRICS Bank – which former President Dilma Rousseff leads today – will be involved, she said that Brazil is in talks with “all the multilateral banks.”