President-elect Luiz Inacio Lula da Silva’s victory over incumbent Jair Bolsonaro in Brazil on October 30 may open the door to a single currency proposal for Latam countries. Lula announced it as part of his election campaign, preaching the utility of a common currency as a means to combat inflation and dependence on the U.S. dollar.
Brazil’s Lula may spearhead LATAM’s single currency proposal
President-elect Lula da Silva’s sweeping victory in the October 30 elections may lead to the rise of a new common currency for Latin America, judging from the politician’s statements. As part of his presidential campaign, the left-wing politician from the Brazilian Workers’ Party commented on the need for a single currency on the continent and described the opportunities such a change could bring.
Lula commented on the subject at a rally celebrated on August 30, stating.
We intend to restore our relationship with Latin America. God willing, we will create a Latin American currency. (According to Lula’s collaborators, this currency might be called the Sur (Spanish for “South”) and could be capitalized based on the volume of transactions between countries on the continent. Lula stated at the time that “we do not need to be dependent on the dollar,” and that the purpose of such a currency would be to weaken the dependence on the dollar, which has allegedly caused much trouble and economic imbalance in countries such as Venezuela and Argentina.
International Affairs and Further Currency Projects
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The geopolitical stance of other governments on the Latam continent may help Lula realize this proposal. This is because the majority of governments on this continent are seen as leaning left in their policy outlook.
At the inauguration of Colombian President Gustavo Petro on August 7, Chilean President Gabriel Boric commented on the issue and, while positiveabout the proposal, noted that muchmust be done before such a step can be taken
He also pointed out that multi-country integration organizations such as the Andean Community and the Serac (Community of Latin American and Caribbean States) could also be activated to this effect.
At the global level, there are also proposals to replace the dollar as a trade and reserve currency. In particular, Russian President Vladimir Putin announced at the 14th BRICS Summit in July a project to create a single currency based on a basket of currencies of the BRICS nations. There are also reports that Russia and China are involved in the development of a gold-backed currency.
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