BRASILIA, April 20 (Reuters) – Brazil’s government,
seeking to increase competition and reduce costs in transactions
in local currency, decided on Thursday to simplify procedures of
the local currency payment system (SML), an infrastructure that
brings together the central banks of Brazil, Argentina, Paraguay
and Uruguay.
In a statement, Brazil’s central bank said the resolution
approved by the National Monetary Council, the country’s top
economic policy body, expands the list of institutions eligible
to operate in the SML “in order to make it an additional product
for clients of institutions authorized to operate in foreign
exchange by the central bank.”
The measure comes after President Luiz Inacio Lula da Silva
recently stressed that developing countries should depend less
on the U.S. dollar, aiming for increased trade in local
currencies.
“We need a currency that gives countries more calm,
because today a country needs to run after the dollar to be able
to export, when it could export in its own currency,” he said
last week.
The move also follows the
freefall
of Argentina’s peso currency, which hit a record low
against the U.S. dollar as concerns grew about the country’s
economy, with 104% inflation, reserves dwindling and drought
hitting exports.
According to the central bank, the changes also involve
simplification and standardization of operational procedures in
the system, which enables one of the counterparties, typically
the exporter, to establish the cost of their goods or services
in their native currency. This eliminates exposure to exchange
rate fluctuations.
The SML system is established by agreement between
central banks. Since 2008, the systems in which the Brazilian
central bank participates have moved around 50 billion reais
($9.9 billion), said the central bank.
($1 = 5.0486 reais)
(Reporting by Marcela Ayres; Editing by Leslie Adler and David
Gregorio)
