Brazilian Finance Minister Fernando Haddad trip cancelled that he intended to do in China to attend the meeting of New BRICS development bank, based in Shanghai. Economy Minister Sergio Massa will also go there, looking for financial support.
The purpose of Haddad’s trip had been a request from President Lula da Silva to discuss how the brand new financial entity chaired by Dilma Rousseff can help Argentina, in need of dollars. In any case, there is the possibility that the Brazilian official will participate in the meetings virtually, according to the Brazilian press. The meetings are on Tuesday 30 and Wednesday 31 May.
Haddad’s decision to stay in Brazil is not due to problems with Argentina, but to the internal situation of his country, where the new fiscal framework is being voted in Congress and a tax reform on consumption is being negotiated.
Lula repeats to those who are against helping Argentina that, rather than lend a hand to his Mercosur partner, his intention is to support Brazilian exporters who send their products to the Argentine market.
One of the measures under study is for the Brics Development Bank (which brings together Brazil, Russia, India, China and South Africa) to act as guarantor for the payment of imports that Argentina makes from Brazil without using dollars. For this it is necessary change the articles of association of the financial institution.
Massa will also travel to Beijing to negotiate the expansion of the trade quota with freely available China. Today, Argentina uses $5 billion and expects China to provide another $4 billion.
“The trade is $18 billion, the expansion was from $1 billion to $5 billion that could be used and that we are actually using. And the expansion that we are negotiating is to increase usability, not to expand the exchange,” sources from the Ministry of Economy said.
Charles Arterburn is a seasoned business journalist for News Rebeat, where he provides comprehensive coverage of the latest trends and developments in the world of finance and economics.