Sunday, September 24, 2023

Sergio Massa ready to travel to China in search of financing

Massa will attend the BRICS Bank meeting in Shanghai on Tuesday 30 May and Wednesday 31 May to explore new options to reduce dependence on the dollar as a transaction currency in trade operations.

BRICS is an association of countries made up of Brazil, Russia, India, China and South Africa that seeks to consolidate an alternative position to the hegemony of the United States.

One of the points to be analyzed is the possibility that the banking institution that groups these nations modifies an article of its statute to allow Argentina to trade with Brazil without using the dollar.

It was an option during President Alberto Fernández y Massa’s last visit to Brazil after Brazilian President José Inácio “Lula” da Silva closed the possibility of direct financing of Argentine exports.

For Brazil to implement a swap mechanism similar to what Argentina has done with China, it had to go through Congress, a condition that Lula was not in a position to offer.

Therefore, the possibility of doing it through the BRICS Bank was opened, which in turn could expand its implementation to other countries.

In addition, Massa will seek to enable another tranche of yuan swaps with China. The total amount available is US$18,000 million, of which one line of US$5,000 million is in use and a new line for the same amount is expected to be opened.

“The swap is US$ 18 billion. The increase was from US$ 1,000 million to US$ 5,000 million that was usable, that is, it went from US$ 1 billion to US$ 5 billion that could be used and, in fact, we We’re using it. And the expansion we’re negotiating is to increase utilization capacity, not to expand interchange,” he explained from the Palacio de Hacienda.

During the past week, the government issued a series of measures that further restricted operations with the dollar. Among them, he asked oil companies to use their own funds to finance their operations for the next 90 days.

The question about the negotiations facing Massa is about the speed of approval. Given that a swap with China is already in place, this appears to be the closest possibility of obtaining financing, but the opportunity in negotiations with the BRICS bank is not so clear given the urgency with which Argentina is going through with the dollar. Is.

The delegation that Massa will lead will also include Agriculture Secretary Juan Jose Bahillo and INDEC chief Marco Lavagna.

Nation World News Desk
Nation World News Desk
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