Brazil and Argentina have expressed a desire to advance discussions on a common South American currency to be used for financial and trade flows, according to Reuters. The currency would not circulate within Brazil or Argentina but rather would be used in clearing houses to execute trade payments between the two neighbors, helping in part to reduce reliance on the dollar, according to the report.

FT estimates that a currency union covering all of Latin America would represent about five percent of global GDP whereas the euro—the world’s largest currency union—covers about 14 percent of global GDP when measured in dollar terms. Trade between Brazil and Argentina (South America’s two largest economies) reached $26.4bn in the first 11 months of 2022—almost 21 percent higher than the same period in 2021, according to FT.

Last Updated on February 12, 2023 by Ramin Seddiq