Brazil to discuss export credit line with Argentina

Brazil’s President Luiz Inácio Lula da Silva will meet his Argentinian counterpart, Alberto Fernández, in Brasília on May 2nd to discuss bilateral trade. The meeting comes as the finance ministry’s executive secretary, Gabriel Galípolo, said the day before that Brazil is considering helping its crisis-stricken southern neighbor with a credit line to stimulate exports.

“It would be financing for Brazilian companies that sell to Argentina, which are these companies that import services and goods from Brazil. What we’re looking into is how to make this export credit possible given the restrictions that exist today on Argentina’s balance of payments,” Galípolo told TV channel GloboNews.

Galípolo stressed that around 210 companies maintain business ties with Argentina, explaining that the lack of mechanisms to finance exports to the South American partner caused losses of US$ 6 billion as Argentina opted to trade with China items that Brazil could have supplied. The Asian nation, in turn, has been investing in financing mechanisms, providing alternative payment methods.

Check below the top 10 Brazilian exports to Argentina in the first quarter of 2023, according to the DataLiner data service.

Top 10 exports to Argentina | Jan 2023 – Mar 2023 | TEU

Source: DataLiner (click here to request a demo)

According to the secretary, the BNDES [Brazilian Development Bank] should play an important role in this process, acting as an “Eximbank.” He highlighted that operations need to follow governance and guarantee processes.

Furthermore, the representative of the Treasury commented on the studies for creating a common currency to facilitate trade between the two countries, currently accounted for in dollars. He also stated that the country may announce more measures in the second half of the year aimed at stimulating trade with Argentina.

“We can expect new measures by the second half of the year that will boost our collaboration with Argentina. Brazil needs to try to find a joint solution,” he said with no further details.

Source: Valor Econômico

To read source material for this story, please check: https://valor.globo.com/brasil/noticia/2023/05/01/brasil-estuda-linha-de-credito-para-incentivar-exportacoes-a-argentina.ghtml

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