Argentina considers dumping dollar in Latin American trade

Argentina is to propose to the Latin American Integration Association the idea of ditching the dollar in Latin American trade. It would be an extension of an existing treaty between Argentina and Brazil.Argentina is considering dropping the dollar in its trade with other Latin American countries as a way of "obtaining better liquidities," the head of its central bank said Monday.

The idea is to be floated at a meeting of the region's biggest economies to be held in the next couple of months, Arnaldo Bocco told El Mundo radio in Buenos Aires.He added that the initiative would be based on expanding a September 2008 treaty between Argentina and Brazil that allows for companies in both countries to trade with each other without using the dollar as a go-between currency.Currently, the US unit is widely used in Latin America as the reference currency in contracts, to minimize the risk of using national currencies that have been victim to hyperinflation and exchange volatility in the past.Bocco said the idea is to be presented in May or June to the Latin American Integration Association, a trade body created in 1980 that today counts Argentina, Bolivia, Brazil, Chile, Colombia, Cuba, Ecuador, Mexico, Paraguay, Peru, Uruguay and Venezuela as members.