Economy Minister Sergio Massa and his Brazilian counterpart Fernando Haddad announced on Monday an agreement to advance a line of 366-day import financing. The mechanism aims to postpone the use of foreign currency and thus facilitate transactions between companies of both countries, today complicated by the difficulty accessing dollars due to restrictions to manage reserve shortages.
The government tries to decompress a scenario marked by pressure on parallel dollars and a drought that could reduce the supply of foreign exchange from agriculture by US$10,000 million in an election year this year. The lack of foreign currency has led to a tightening of trade restrictions and the central bank’s debt to importers reached $9 billion in November, according to BCRA data.
The fear is that the trade deficit with the neighboring country and partner will increase. The accumulated in 2022 with Brazil was US$3,365 million, according to INDEC.
In this picture, a commercial credit managed through Banco do Brasil and Banco Nación, with cross guarantees. The goal is that a local company you don’t have to wait 180 days to access currencies to pay the supplier in Brazil, sOtherwise, request a letter of credit from the Nation and with this document, the supplier will be able to take out a loan at the Banco do Brasil in reais for the equivalent of the transaction in dollars.
“Banco do Brasil makes a commitment to Brazilian companies and Banco Nación makes a commitment to Argentine companies. By increasing the credit line, Banco do Brasil to 366 days, the foreign currency payment obligation lasts for one year and one day, i.e. the positive impact of the Central Bank’s reserves, because the payment transaction is automatic by Banco Nación and the financing in reais is carried out by Banco do Brasil for Brazilian companies”, explained Massa.
According to the minister it is a “extension” of an existing credit line in favor of Brazilian companies which would automatically access the export system to Argentina and Argentine companies that do not have the difficulty of the financing regime provided for by the SIRA regime. “It is a boon for companies and banks and also for the Central Bank which eases the short-term payment of these imports from Brazil,” the official said.
The next stop will be the trip to Brazil by the team from the Ministry of Economy and a delegation from Banco Nación. Massa bets on defining the financial mechanism with the guarantee schemes in that meeting. Haddad himself underlined that the “first step” will be the constitution of a guarantee fund and that Banco do Brasil assumes no risk, as, according to reports, Argentina is expected to provide a collateral asset.
“Banco do Brasil will end up financing the importer in Argentina, you will never get the dollars. Since you can’t transfer currency to Brazil, the Brazilians don’t want to deliver the goods to you and the trade debt grows. Now you won’t have a debt with the supplier, but it will be between the banks, the problem will be between them when it has to be canceled,” said a businessman who was attending the talks.
The other point that will be addressed in the Brazil tour will be the BNDES loan for US$ 820 million of pipes produced in Brazil for the second section of the Néstor Kirchner gas pipeline. To this should be added the “pre-agreed” credit with CAF for 520 million dollars and another with the private sector to finance the work, with which the aim is to save 2.2 billion dollars a year.
Source: Clarin
