Brazil proposes yuan guarantees for exports to Argentina, finance minister says

Brazil has submitted a proposal to Argentina aimed at securing Chinese yuan guarantees for Brazilian exports to the neighboring country in an initiative involving state-run lender Banco do Brasil, Finance Minister Fernando Haddad said on Wednesday, August 23.

Banco do Brasil under the proposal would oversee the conversion of yuan back into Brazilian reais, based on provided guarantees, Haddad told a press conference in Johannesburg on the sidelines of the BRICS nation summit.

Haddad also said that the total operation stands at around US$ 100 to US$ 140 million.

The chart belows shows the trade patterns between Argentina and Brazil, breaking down Brazilian exports and imports month by month. The data below was collected by the Datamar Business Intelligence Team.

Trade movement between Argentina and Brazil | Jan 2019 – Jun 2023 | TEU

Source: DataLiner (click here to request a demo)

“It is great news for Brazilian exporters, and so it will be for Argentina., as they may be able to maintain a steady flow of sales with a 100% guarantee. There will be no complications for Brazil because the exchange will be directly from yuan to the real, assuring the National Treasury that there is no default risk,” said the minister.

The Brazilian government has been studying ways to help Argentina for months, immersed in a financial and liquidity crisis that limits the neighboring country’s access to the dollar.

In addition to the guarantee to finance exports,the Lula administration attempted to incorporate the Brics bank (dubbed the New Development Bank) in some sort of aid operation. There was a ban on any form of direct help, and Brazil began to focus on Argentina’s participation as a partner of the NDB.

Source: Jornal do Comércio

To read the original text, go to: https://www.jornaldocomercio.com/economia/2023/08/1120448-brasil-pode-garantir-exportacoes-para-a-argentina-em-yuan-diz-haddad.html

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