Welcome To Latam Insights – The following is a compilation of the most important economic and crypto news from Latin America over the past week. In This issue: Latin American Nations Join Forces to Fight Inflation, BTG Pactual Launches Stablecoin, and Argentina Debuts New Dollar Exchange Rate.
Latin American Countries Unite To Battle Inflation
On April 5, eleven Latin American countries including Argentina, Brazil, Chile, Colombia, Cuba and Venezuela signed an agreement to tackle inflation and set up export and import facilities for essential goods. This is an important step to ensure citizens have access to essential items at reasonable prices.
The agreement included the following measures “advance in the definition of commercial facilities, as well as logistical, financial and other measures, that allow the exchange of products of the basic basket and intermediate goods to occur in better conditions.”
Andres Lopez Obrador, President of Mexico, was the first to propose the agreement. On March he said:
We can exchange commercially and economically if we agree to remove any tariffs or sanitary measures. Each country has something to offer. This is so that food and basic products can be delivered at a more affordable price.
BTG Pactual Launches Dollar-Pegged Stablecoin
On April 4, BTG Pactual, a Brazilian investment bank with more than $100 billion in assets under management in the fourth quarter of 2020, unveiled the BTG Dol, a dollar-pegged stablecoin. This is the first stablecoin asset to be launched by a bank and is designed to bridge traditional finance and digital finance. The bank will charge a fee of just 0.5% for users to make their own currency.
André Portilho, head of Digital Assets BTG Pactual, commented that customers will be able to benefit from the development of this stablecoin. “It provides a more efficient, secure, and intelligent way to invest in dollars,” he said. BTG Pactual will handle dollar-pegged stablecoins as well as the funds that back them.
Argentine Government Unveils New Dollar Exchange Rate
The Argentine government has announced the launch of a new exchange rate for agricultural producers, allowing them to liquidate their products at a rate of 300 pesos per U.S. Dollar, higher than the previous rate. The initiative is expected to generate more than nine billion dollars, which will be used to strengthen the country’s reserves.
The government is obligated to have at least $8 Billion before December in order to comply with agreements made with the International Monetary Fund (IMF). The government has a negative balance after investing $3.4 billion in stabilizing the market value of the Argentine peso, and is facing high inflation rates and currency devaluation.
What do you think about the latest developments in Latin America this week? Leave a comment in the section below.
