Brasília – Brazil and Uruguay signed an agreement which will allow exporters and importers to make and receive payments in their respective local currencies, without the need for a foreign exchange contract. The new system can also be used for the payment of pensions, in addition to small value remittances.
The mechanism will be operational as of December 1st and its use will be optional. The agreement, announced on Sunday (2nd) by the Brazilian Central Bank (BC, in the Portuguese acronym), was signed by the governors of the central banks of Uruguay (BCU), Alberto Graña, and Brazil, Alexandre Tombini, during the meeting of South American central bank governors, held on Friday (31st) in Lima, Peru.
According to a press release from the BC, the mechanism will increase the access of small- and medium-sized agents, broaden the market for the Brazilian real and the Uruguayan peso and reduce transaction costs. The BC stressed the agreement is similar to the mechanism already operational between Brazil and Argentina.
The BCU has released a communiqué stating that the system will also entail a change in communication standards, and that it is working on making the software used in the process operational. According to the Uruguayan monetary authority, the agreement will “minimize the time spent in processing operations, facilitate financial inclusion for natural persons and small- and medium-sized companies and improve quality for those which already develop such operations.”
*Translated by Rodrigo Mendonça
