Countries must have financial stability to have a common currency, says economist

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In an interview with CNN this Monday (23), senior economist at Bloomberg Economics, Adriana Dupita, analyzed the possible adoption of a common currency between Brazil and Argentina, which has generated noise in the markets and doubts about the functionality — and need — for the countries involved.

According to her, “this type of movement only makes sense when countries are stabilized”.

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“They have to have a minimum of financial stability for their currencies to be internationally accepted. If these currencies are not accepted, as is the case with the real and the peso, a currency that is a combination of the two will not be accepted either”, explains Dupita.

In the economist’s view, the proposal needs to be unraveled from the outset. “It would not be a single currency, but a common one. This is the first distinction that needs to be made more clearly, because it is not very clear, ”she said.

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“Who will issue this currency? What would it be good for? What would the criteria be? Would there be a harmonization of monetary and fiscal policy, which exists when there is adoption of a single currency, or would it be just a matter of having an intermediary currency, other than the dollar, to carry out transactions? And why couldn’t that currency be the real or the peso?”

Check out the full interview in the video above.

Source: CNN Brasil

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