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Montevideo, September 25th 2023 - 17:12 UTC



Argentina to join BRICS bank?

Friday, June 2nd 2023 - 11:01 UTC
Full article 9 comments
Rousseff found the fastest way for Argentina to get help from the BRICS NDB Bank Rousseff found the fastest way for Argentina to get help from the BRICS NDB Bank

Argentine Economy Minister Sergio Massa was told in Shanghai by New Development Bank President Dilma Rousseff that the road was clear for Argentina to join the entity and thus be able to obtain some financial backing in the near future, it was reported. The formal announcement will be made next August alongside those concerning Saudi Arabia, Egypt, and Zimbabwe.

“Sergio, I have good news, I found the shortcut. The board of directors has agreed to add Argentina to the bank. It will be announced at the August meeting in South Africa,” Rousseff reportedly told Massa at the bank's headquarters in Pudon, the skyscraper district of Shanghai. “It is the fastest way, to go straight to August,” Rousseff went on.

In order to become a member of this bank, the four new members are required to contribute US$ 1 billion. Argentina will have to disburse US$ 250 million, which will be integrated with sovereign debt bonds in dollars.

The meeting was Massa's last activity in Shanghai, before traveling to Beijing where he will hold encounters with Chinese government authorities to negotiate the renewal of various swaps with which to intervene in the local foreign exchange market and keep the US dollar from soaring against the Argentine peso.

As for the BRICS bank, financing for Argentina would stem from a capital increase that Brazil will provide. The bank has already authorized similar operations between South Africa and several African countries and also to India, which has helped Bangladesh in this way.

Tags: BRICS.

Top Comments

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  • Pugol-H

    Having just got a new credit card, Sr Massa goes on to Beijing to increase the limit on an existing one, now almost maxed out.

    He has proved to be very adept at obtaining more loans, it has to be said.

    However I don’ see any plan to pay anything back, perhaps that is being left to the next Government.

    Without a MASSIVE boom in the Argentine economy or DRASTIC cuts in public spending, another default looks inevitable.

    Never mind stopping printing more money and reducing the money supply to control inflation.

    And this is a ‘good news story’? Or just another step on a downward spiral?

    Jun 02nd, 2023 - 02:01 pm +1
  • Pugol-H

    Doesn’t look like it will go ahead.

    ‘Argentina's internal policies are complex and include domestic price controls, multiple exchange rates for the peso and frequent balance of payments crises. “The question is how to structure this solution without the risk remaining entirely within the Brazilian market.”’

    ‘There are also doubts about the extent to which Brazil can tap gas from Vaca Muerta, given that Argentina is a major consumer and importer of fuel, especially in the winter.’

    ‘”There is still no clarity about how this gas will reach Brazil. If through Rio Grande do Sul or Bolivia. Or by LNG, liquefied in Buenos Aires, which would be more expensive”’.

    If, all the above notwithstanding, they can supply gas to Brazil the price will be exorbitant, it has to be to cover the cost of the loan, unless of course they default, again.

    Jun 02nd, 2023 - 02:26 pm +1
  • Brasileiro

    Great NBD initiative!

    It is very important for South America that Argentina settle its debt with the IMF and manage its economy with anti-cyclical measures.

    The dollar has become a heavy anchor that imprisons and enslaves us.

    Jun 02nd, 2023 - 11:16 am 0
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