Argentina and Brazil discussing common currency
The two largest economies in South America are in early talks to create a common currency, as part of a co-ordinated bid to reduce reliance on the US Dollar“Our finance ministers, each with his own economic team, can make us a proposal for foreign trade and transactions between the two countries that is done in a common currency,” Brazilian President Luiz Inacio Lula da Silva said at a news conference in Buenos Aires, Argentina, according to Reuters.
Speaking on his first international visit since taking office, Lula said that the currency would initially be designed for trade and transactions between Brazil and Argentina. It could later be adopted by fellow members of Mercosur — South America’s major trade bloc.
Argentina's President Alberto Fernandez said that, while it was not yet clear how the sole currency could function in the region, they agreed that depending on foreign currencies for trade was harmful.
However, some analysts are highly sceptical, dismissing the proposal as ‘pie in the sky’ because of the discrepancies between the two economies.
Based on the materials of www.cnbc.com