BRASILIA, March 21 Brazil and Argentina will
help set up a private credit line for local businesses to
bolster trade that has been hit by a sharp currency depreciation
in Argentina, Brazilian Trade Minister Mauro Borges said on
Both countries will ink a deal on March 27 to safeguard
credit flows between the neighbors, helping commercial banks
interested in offering loans to local businesses.
"We have been working on structuring this commercial credit
line to increase our bilateral trade," Borges told reporters in
He said the details of the deal are still being worked out,
but that Brazil's state-run development bank BNDES will not
participate in the operation.
Brazil scored its smallest trade surplus with Argentina in
nearly a decade last year as the neighboring country raised
barriers on Brazilian products to protect its balance of
The sharp depreciation of the Argentinian peso, which has
slid nearly 19 percent against the US dollar so far this year,
has also reduced the supply of dollars for importers, curbing
the purchase of Brazilian manufactured goods.
Exports of diesel-powered Brazilian cars to Argentina fell
nearly 6 percent in the first two months of this year from the
same period in 2013, according to trade ministry data.
Brazilian officials are worried that a drop in exports to
Argentina could not only hurt an already weak local industry,
but erode the country's balance of payments.
(Reporting by Alonso Soto; Editing by Stephen Powell)