Latin American countries could be trading without using U.S. dollars by next year according to Brazil’s Development, Industry and Foreign Trade Minister.
Financial publication Portafolio reported that Fernando Pimentel, who attended Colombia’s National Association of Foreign Trade congress and met with his Colombian counterpart Sergio Diaz-Granados, said that trading in local currencies is a concrete step towards regional integration.
The idea for dollar-less trading was suggested by Colombian President Juan Manuel Santos at a UNASUR meeting. Pimentel met with Santos to express Brazil’s interest in the idea and a working group of UNASUR foreign ministers has been set up in Buenos Aires, Argentina.
Daniel Niño, Managing Director of Research and Strategy at Bancolombia, Colombia’s largest bank, told Colombia Reports the idea of dollar-less trading is “in a very early stage among ministers” and “it is not going to take any shape in the short term.”
Niño went on to say “the main problem when talking about currency as a way to have commercial trade [is] you need to have reliable currencies, but not all Latin American currencies are reliable.”
Colombia and Brazil have been working to improve economic ties between the neighboring nations. In August, the first Colombia-Brazil investment forum was held to asses the business opportunities the countries can offer each other.
Commenting on Colombia’s trade with Brazil, the minister said “the trade balance is in favor of Brazil however the balance of capital is in favor of Colombia. A mechanism can be built so that the balance in favor of Brazil remains in pesos and can then be used by Brazilian companies investing in Colombia.”