The idea starts in the two largest economies in South America, but should be extended to other countries
Brazil and Argentina are preparing to create a single currency, abandoning the real and the Argentine peso. Information is provided by financial timeshighlighting that this could become the second largest currency bloc, after countries sharing the euro.
The two countries, the two largest economies in South America, are expected to discuss and announce their plans during a summit to be held this week in the Argentine capital, Buenos Aires, where leaders of other countries in the subcontinent will discuss. be present.
Brazil has proposed that the currency, which is expected to serve more than 250 million people, be called “sur” (South in Spanish), hoping that the change will mean an improvement in regional trade, while less dependence on the dollar is expected.
As for the transfer, there is still no clear idea, as officials acknowledged the parallel with the current currencies of the two countries.
“We will begin to study the necessary criteria for a common currency, which includes everything from financial matters to the role of central banks,” said Argentine Minister of Economy Sergio Massa, in statements to the British newspaper. To generate “false expectations”.
The project will start between the two countries, but the goal is to expand it to the rest of South America’s neighbours. Deep down, as Sergio Massa said, it is “the first step on the long road that Latin America has to go”.
“This is Argentina and Brazil to invite the rest of the region.”
If expansion to the entire subcontinent is confirmed, it will mean a union between countries that account for 5% of the GDP of the entire world, and even less than 14% of the eurozone countries, of which Portugal is a part.
Despite being emerging countries, Brazil and Argentina have very sensitive monetary systems and it is common to see significant devaluations of their currencies. The creation of a new currency would certainly also aim to solve these problems.
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