After three months of negotiations and last week’s exchange rate tensions, the government will have to continue to wait for help from Brazil to lighten reserves. That was one of the conclusions that appeared to come from the summit Alberto Fernández held with his counterpart Luiz Inácio da Silva in Brasilia on Tuesday, where they agreed to continue efforts to finance Brazilian exports to Argentina next week, without using dollars .
“We have agreed that minister (Fernando) Haddad’s team with (Sergio) Massa’s team will meet next week to see how we can make these things happen.”, specified the president during the joint statement with Lula from the Palacio de la Alvorada. There the leaders and their ministers were locked up for four hours, without being able to close the deal they had started negotiating at the end of last January.
Fernández celebrated Lula’s “explicit support” and explained that the Brazilian government “has made the decision to help Brazilian companies continue to export to Argentina.” “We were asked to do some tasks that we have already done, which have to do with the necessary guarantees for Brazil to favor these credits,” the president said, warning that Argentina is “re-discussing” the agreement with the IMF.
Lula da Silva, on the other hand, was ambiguous. She revealed that her country will intercede with the IMF to “take the knife out of Argentina’s neck” on the external debt issue and expressed her willingness to help Argentina find a “solution”. But you still insisted that the issue of guarantees still needs to be resolved and proposed the collaboration of the Brics bloc (Brazil, Russia, India, China and South Africa), which will only meet at the end of May.
Last January, during Lula’s visit to the country, it was agreed to expand the local currency payment system (SML), a mechanism in place since 2008 for commercial transactions up to 360 days that allows you to pay for exports and imports in their respective currencies, without using dollars. And, on the other, revitalize the credits offered by the BNDES to Brazilian companies that export to Argentina, but which today only cover capital goods.
These topics were in the first meeting that Fernández had with Lula from 5.30 pm and then in the expanded meeting with the Minister of Economy, Sergio Massa, Ambassador Daniel Scioli, and the Chief of Staff, Agustín Rossi, together with the Foreign Minister Santiago Cafiero and spokeswoman Gabriela Cerruti. While on the other side the head of the Economy, Fernando Haddad, his deputy Gabriel Galípolo, the Foreign Minister Mauro Vieira and the international advisor of Lula Celso Amorim took part.
The government must avoid a major outflow of dollars in a context in which the deficit with the neighboring country was 1.2 billion dollars in the first three months. And he also went looking for a sign of support from the region’s main ally amid the drought and crisis that catapulted the blue dollar close to $500 last week. the early disbursements that the IMF resists.
In this context, Massa announced last week the payment of Chinese imports with yuan for 1,000 million dollars in May, since the activation of the swap with that country. And, days later, he promised twenty executives that he would carry out a similar trade plan with Brazil, but without resorting to exchange. But the Brasilia summit left more doubts than certainties and reflected the caution with which the neighboring country moves.
Brazil tries to recover lost ground before the Chinese advance with the exchange and financing of Argentina. More than 200 Brazilian companies no longer export bilaterally and the trade debt with that country is growing. But Lula has now added an unexpected request given the distrust of the weight: the intervention of China and Russia, heavyweights in the BRICS.
“We don’t want them to lend you money, but to give us guarantees to facilitate relations between Brazil and Argentina,” the president said.
Source: Clarin
