The Local Currency Payment System (SML in the original) between the Central Banks of Brazil and Paraguay are to become operational next week. The change will make it possible for Brazilians and Paraguayans to send and receive money in their respective currencies, with no need for a foreign exchange contract.
The Brazilian Central Bank announced today it approved the rules for the operation of the new system, under an agreement forged with Paraguay’s Central Bank, to become effective next Monday (Aug. 6).
Transactions conducted under the new system may include the payment of imports and exports of goods and associated services, like shipping and insurances, a range of services not linked to the trade of goods, and unilateral current transfers, like pensions.
Ease of access
“The Local Currency Payment System makes international transfers more efficient and costs lower, enabling small and medium agents in both countries to gain access to trade and expand the use of their national currencies—the real and the guarani,” a note released by the Brazilian Central Bank reads.
Brazil’s Central Bank has been connected via a Local Currency Payment System to that of two other countries: Argentina, since 2008; and Uruguay, since 2014.