Rule

Change

Massa

In an effort to provide economic relief for Argentina amidst its ongoing financial crisis, Brazilian President Luiz Inacio Lula da Silva has pledged to facilitate assistance from the <a href="https://www.cryptopolitan.com/brics-new-development-bank-away-from-usd/" data-type="post" data-id="294095">BRICS</a> bloc<a href="https://www.telam.com.ar/notas/202305/627151-fernandez-lula-visita-inversiones-reservas.html" rel="nofollow noopener" target="_blank"> </a>and negotiate a credit line for Argentine purchases of Brazilian exports using reals.



<h2 id="brics-bloc-assistance-and-new-development-bank-rule-change">BRICS Bloc Assistance and New Development Bank Rule Change</h2>



Brazil, as a member of the BRICS bloc—comprising Brazil, Russia, India, China, and South Africa—is taking on the role of liaison between Argentina and the bloc to facilitate much-needed economic help. 



In a meeting lasting four hours, President Lula expressed his commitment to assisting Argentine President Alberto Fernandez in seeking international aid. 



During this meeting, Lula contacted Dilma Rousseff, the current President of the New Development Bank (NDB), requesting a rule change to allow the NDB to offer direct aid to countries outside of the BRICS bloc.



Lula criticized the International Monetary Fund (IMF) for its role in Argentina&#8217;s deteriorating economic situation, which is characterized by record inflation and devaluation. He urged the IMF to ease the pressure on Argentina, emphasizing the country&#8217;s desire for growth, job creation, and improved living conditions.



<h2 id="establishing-a-credit-line-in-brazilian-reals">Establishing a Credit Line in Brazilian Reals</h2>



Brazil and Argentina are also exploring the possibility of creating a direct credit line in reals for Argentine purchases of Brazilian exports. This credit line would enable an intermediary bank to collect payments in reals, with Argentina replenishing the funds at a later date. 



Establishing this credit line could help Brazilian businesses regain their position as significant trade partners for Argentina, a role that China has increasingly taken over in recent years.



Brazilian Finance Minister Fernando Haddad estimates that Brazil has lost $6 billion in exports to Argentina over the last five years, largely due to China&#8217;s growing presence in the region. 



However, Lula acknowledged that Argentina is temporarily leaving the meeting without immediate financial support, as an alternative means of financing Brazilian exports has yet to be agreed upon.



The economic teams of Argentine Economy Minister Sergio Massa and his Brazilian counterpart, Fernando Haddad, will continue discussions next week in search of a solution to de-dollarize trade between the two nations. 



This would prevent the Argentine Central Bank from using foreign currency to pay Brazilian exporters, who would receive guarantees from their country&#8217;s Treasury on these loans.



The next steps in the negotiations will involve high-level talks between the economic teams of both countries, likely to be held in Sao Paulo next week. These discussions will be supported by the influential Industrial Federation of the State of Sao Paulo (Fiesp).



In parallel to these negotiations, President Fernandez has confirmed that the Argentine government is in ongoing negotiations with the IMF regarding its current commitments. 



The hope is that the BRICS bloc, as well as the NDB, can provide much-needed financial assistance to Argentina and help to alleviate its ongoing economic crisis.

Brazil to assist Argentina, discusses credit line in Reals

Table of Contents

Cryptopolitan_News

Other articles published on May 5, 2023

Cardano price analysis: Bullish uptrend marks ADA price above $0.3938

Is Aptos (APT) Set For A Price Increase? Whales Are Investing In This Token Instead

Stripe Launches Fiat-to-Crypto Onramp With New Hosted Option

Binance Under DoJ Probe For Possible Russian Sanctions Violations

RAK Digital Assets Oasis Appoints James Bernard to Boost Commercial Operations

Is XRP Primed for a 30,000% Surge? Analyst Weighs in

Join our free newsletter for daily crypto updates!