Brazil and Uruguay agree to bilateral trade in local currencies

Monday, November 3rd 2014 - 08:59 UTC

Full article 5 comments

The money rate exchange for the operations will be published on a daily basis by the central bank of each country

Brazil and Uruguay as of next December will be able to use local currencies in bilateral trade, disregarding appealing to US dollars, based on the agreement signed last Friday between the central bank presidents of the two countries, Alexandre Tombini (Brazil) and Alberto Graña (Uruguay).

The accord signing ceremony took place in Lima, Peru during the XXVIII meeting of South America central bank presidents, held in Lima under the framework of the “Local Currencies Payment System” (SPML), which is a bilateral agreement and enables to make and collect payments in local currencies.

The idea is for the system to be extended to other countries, but the starting point is bilateral.

“Exporters and importers will pay and collect in their respective currencies. Central banks assume no significant credit risk with their counterpart or credit risk with the financial companies”, according to the terms of the accord.

The purpose of the initiative is to reduce transaction costs, minimize the time spent in processing operations and facilitate financial inclusion for physical persons and small and medium sized companies.

The money rate exchange for the operations will be published on a daily basis by the central bank of each country and will be “uniform and independent of the transaction volume involved through the SPML system”, adds the accord.

The system “is extended to goods, services and expense-related operations, as well as payment of service operations, unilateral transfers such as old age pensions and remittances”.

The SPML system operational as of next month was first proposed in Uruguay at the end of 2008 but the country's Exporters Union.

Categories: Economy, Politics, Brazil, Uruguay.

Tags: Alberto Graña, Alexandre Tombini, Brazil, Brazil Central Bank, Central Bank of Brazil, Local Currencies Payment System (SPML), Uruguay.

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Brasileiro
The dollar is losing confidence and importance. It is a worldwide trend.

And when the dollar is no longer needed for business transactions between countries?

And when the dollar is no longer the international reserve currency?

What Western countries make about their monstrous debts and their deficits?
Nov 03rd, 2014 - 11:01 am 0
Tik Tok
Hey numbskull Brasshole, pot calling the kettle black, it's actually Brazil currency that is losing confidence, devaluing......it's actually Brazil building up debt and not balancing its books....its actually Brazil protectionism that makes the country less relevant in a globalized world....
Nov 03rd, 2014 - 02:32 pm 0
ChrisR
Not too sure this is a good idea for Uruguay with DumbAss still in charge.

All she has demonstrated is how she loves to mess with Mr. Market. She has STILL to learn that Mr. Market doesn't like being messed with and WILL get his revenge.

Also Brazil seems to be full of deadheads like the PT and their loyal idiot Brasso. There is no talking to be had with dummies.
Nov 03rd, 2014 - 04:40 pm 0

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