Proposals for New Common Currency Resonate in Latam, to Undermine US Dollar Dependency – Economics Bitcoin News

Recently, two proposals were made for Latam to establish a common currency. The idea was first mentioned by Luis Inacio Lula Da Silva, former Brazilian presidential candidate, in May. Roy Barreras (president of the Colombian Congress) also mentioned it during Gustavo Petro’s inauguration earlier this month. It would decrease the region’s dependency on the US dollars.

Lula and Barreras Offer Latam Common Currency

Due to current economic conditions in some countries, the idea of a common currency between Latam nations has been revived. The former president of Brazil, Luis Inacio Lula Da Silva and Roy Barreras of Colombia have both called for the initiative to be reexamined.

Da Silva declared last month that he will support Latam’s creation of a single currency if he becomes president (he is currently one of Jair Bolsonaro’s contenders for the October general election). Dubbed “sur” (SUR), translated as “South,” this currency would ostensibly strengthen the integration between countries of the region. He said this during a rally held in May:

We are going to create a currency in Latam, because we can’t keep depending on the dollar.

Additionally, the sur could offer a fresh opportunity to control inflation in the region. This is a problem currently being faced by countries like Argentina or Venezuela. The sur may allow countries to maintain their central bank autonomy. This would go against the European Union model.

Roy Barreras, a former president of Colombia, has also called for such a currency. However, he did not give any details. Barreras made the following statement at the induction of Gustavo Petro, the newly elected president of Colombia.

There is an opportunity for a new homeland to emerge, where we can work together with Latam nations to create a common future, share a common competitiveness agenda, have one Latam parliament and hopefully, have one currency. And above all, be dignified.

Vladimir Putin of Russia announced in July plans for a new currency to be used by countries within BRICS. The organization includes Brazil and some analysts think it is an attempt at rivaling the U.S. dollar.

A background on the common currency

Latam has a currency that is common to all people. Actually, a currency was created that could be used across continents to settle trades worth more than $1 million. The currency was called “sucre,” and was the result of the amalgamation of several countries in ALBA, a Bolivarian alternative organization that opposed the US-backed FTAA.

Hugo Chavez, the Venezuelan president, was responsible for creating it in 2009. It was also adopted in Ecuador, Nicaragua, Cuba and Bolivia. The death of the main promoter and US sanctions against Venezuela led to the abandonment of the currency.

Let us know your thoughts on the Latam proposal for a common currency. Leave your comments below.

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