Risks & Opportunities of Emerging Market Economy Currency Internationalisation: the role of Brazil in the Mercosur

Dr Annina Kaltenbrunner , Leeds University Business School

The project is concerned with public policy actions (in particular those of central banks from emerging economies (EM)) with regards to the process of currency internationalisation. The applicant’s underpinning research suggests a strategy of managed currency regionalisation which supports regional trade through a deepening and extension of a regional payment system (SML), initiated by the Brazilian Central Bank (BCB) in 2005. The SML supports the use of regional currencies in trade settlement, in particular for Small and Medium Sized Enterprises (SMEs), essential to stimulate regional trade and reduce the region’s dependence on the US dollar. The proposed project, which builds on extensive previous impact work with the BCB, will enable the applicant to host a two-day high level policy summit on the SML with senior leaders from the BCB and other central banks in the region (Argentina, Chile, Uruguay, Paraguay, Mexico and Chile) as well as key private stakeholders in the SML. This policy summit will further embed the applicant’s research into regional policy decision through: (1) Further dissemination of the research. (2) The Creation of the first major network of SML public policy institutions, private stakeholders, and researchers to identify the main political and technical barriers preventing its expansion, and increase government and private sector buy-in. (3) The development of a joint policy document and research agenda to guide and inform future policy making.

Dr Annina Kaltenbrunner can be contacted by email: A.Kaltenbrunner@leeds.ac.uk