A group of LatAm countries is preparing a regional agreement to address inflation, a problem common to most nations in the region. The initiative, which is headed by Mexican President Andrés López Obrador, would allow the exchange of products with high prices between states to lessen the effects of price increases.
LatAm countries will fight inflation together
A group of LatAm countries is coming together to organize a joint response against one of the biggest problems facing the region at the moment: inflation. Argentina, Brazil, Colombia, Cuba and Mexico are preparing to sign an agreement to counter inflation, said Alberto Fernández, president of Argentina, in a interview with Ámbito, an Argentine medium.
Fernández said that the initiative was proposed by the president of Mexico, Andrés López Obrador, who had called him to find out about different initiatives to curb the effects of rising prices on the region’s economy. There has already been talk of how to organize this mechanism, involving Luiz Inacio “Lula” Da Silva, president of Brazil, Gustavo Petro, president of Colombia, and Miguel Díaz-Canel, president of Cuba.
The Argentine president revealed that a summit is scheduled for March 17 to refine this new agreement and the role that each country will play in it. The ministers of the countries are already organizing the structure of the agreement.
how it will work
Although there is not yet a complete description of the internal functioning of this anti-inflationary mechanism, Fernández offered a brief description of it. The agreement would create a kind of compensation system that would serve to quickly exchange products between countries, focusing on items that show unusual price increases.
For example, if clothing sees an increase in prices in Argentina, the country could look to import it from another country in the group, exchanging it for raw materials or basic products, such as soybeans. The added value of such a mechanism is that the participating countries would not have to resort to settling these transactions with dollars, according to Fernández.
Of all the countries in the group, Argentina presents the highest levels of inflation, with a price rise of almost 100% registered during 2022, and a devaluation process that has brought its fiat currency, the Argentine peso, to historical lows. . Cuba and Colombia were also hit by high inflation, registering increases of 39% and 13.1%, respectively.
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