Argentina seeks relief from dollar

BRASILIA, Brazil — Argentine President Alberto Fernandez and his Brazilian counterpart, Luiz Inacio Lula da Silva, vowed on Tuesday to keep working to come up with a mechanism that would allow them to avoid using the US dollar in trade between the neighboring nations.

Argentina's economy is looking particularly fragile after a run on the peso in the financial markets caused a sharp devaluation of the local currency late last month as well as a drain of US dollars from central bank reserves in part due to a devastating drought that has slashed exports.

There was a lot of anticipation on Tuesday that the two countries would unveil a mechanism allowing Argentine firms to continue trading with Brazil without draining dollars from the country's reserves. Yet after a nearly four-hour meeting, the two presidents made clear they were still fine-tuning the details.

"The meeting was long, difficult and we will carry out many more meetings," Lula said alongside Fernandez as the two left-leaning presidents spoke to the press. "I made a commitment to my friend Alberto Fernandez that I will do every and any sacrifice so we can help Argentina in this difficult moment."

The proposed plan involves a line of credit to finance Brazilian companies that export to Argentina with the intention of avoiding the use of dollar, said Gabriel Galipolo, the finance ministry's executive secretary.

On Tuesday, Finance Minister Fernando Haddad told reporters the two governments are studying possible guarantees in order for Brazil's government to provide such financing.

"They've made the decision to help make sure that Brazilian companies continue exporting to Argentina and they had asked us to do some homework, which we have already done, and have to do with the necessary guarantees," Fernandez said, adding that Economy Ministry officials will be meeting with their Brazilian counterparts next week to fine-tune the details.

Xinhua