The four-hour meeting held yesterday in Brasilia between Argentine President Alberto Fernández and Brazilian President Lula da Silva, which Lula described as “long and difficult,” did not produce a definite plan by which the Brazilian central bank will extend credit lines to domestic exporters to finance their exports to Argentina. This plan to bypass the use of dollars, by allowing Argentine importers to pay in pesos, to be later converted into Brazilian reals, will require more work, as Lula explained, and “many more meetings.”
Next week, Brazil’s Finance Minister Fernando Haddad will travel to Buenos Aires with his staff to continue discussions with his Argentine counterpart Sergio Massa and his team. During their joint press conference following their meeting, President Fernández announced that Lula had given him “some homework"—problems to be solved from the Argentine side, where financial warfare and market speculation have savaged the peso, and drained dollar reserves amidst 104% inflation and a 45% poverty rate. The country also has multiple exchange rates for different categories of trade which is a complicating factor.
The Brazilian President is nonetheless determined to assist Argentina, for which Fernández expressed his deep gratitude at yesterday’s press conference. Lula stressed that he would spare no effort to do this so Argentina “can once again become the prosperous economy of South America … Brazil’s most important trading partner.” That assistance, he said, includes intervening with the IMF to “remove the knife that the [Fund] has at Argentina’s neck"—a phrase Lula used at an April 13 gathering of officials from the BRICS’ New Development Bank (NDB) at its Shanghai headquarters when he accused the Fund of “asphyxiating” Argentina.
