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Brazil, Argentina abandon US dollar

Posted By admin On October 7, 2008 @ 4:02 am In Money Watch | Comments Disabled

Press TV [1]
Tuesday, Oct 7, 2008

Brazil and Argentina have launched a new payment system in their bilateral trade, doing away with the US dollar as a medium of exchange.

The two Latin American nations started the Payment System on Local Currency (SML) on Monday following a last month agreement inked by their presidents to use local currencies in a bid to end transaction in dollars.

On Thursday, Argentine Central Bank President Martin Redrado and his Brazilian counterpart Henrique de Campos Meirelles signed the enforcement of the agreement for the SML, under which exports and imports between the two countries will take place with the Brazilian real (BRL) and the Argentine peso (ARS).

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The new monetary system mainly favors small and medium industries in both countries because it will save them bank charges when averting their local currencies to dollars.

According to the Central Bank of Argentina, the trade between the two major South American economies stands at about 25 billion US dollars per year.

Although the SML seeks to gradually eliminate the dollar from the bilateral trade, the currency will continue its presence in transactions between Brazil and Argentina, as their central banks will set the exchange rate for the real and the peso with respect to the dollar.

Brazilian authorities said that the SML deepens the integration between Brazil and Argentina and hope it will serve as an example to be adopted by other countries of the Mercosur, like Paraguay and Uruguay.

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URL to article: http://www.prisonplanet.com/brazil-argentina-abandon-us-dollar.html

URLs in this post:

[1] Press TV: http://www.presstv.ir/detail.aspx?id=71493&sectionid=3510213

[2] Brazil, Argentina to eliminate US dollar: http://www.prisonplanet.com/brazil-argentina-to-eliminate-us-dollar.html

[3] Argentina loses a third of its dollar deposits: http://www.prisonplanet.com/argentina-loses-a-third-of-its-dollar-deposits.html

[4] Brazil, China talks could moot ditching dollar: http://www.prisonplanet.com/brazil-china-talks-could-moot-ditching-dollar.html

[5] Flashpoint Falklands: Britain dusts off war plans amid calls to send a nuclear submarine after Argentina joins forces with Brazil and Uruguay to blockade islands: http://www.prisonplanet.com/flashpoint-falklands-britain-dusts-off-war-plans-amid-calls-to-send-a-nuclear-submarine-after-argentina-joins-forces-with-brazil-and-uruguay-to-blockade-islands.html

[6] Central banks start to abandon the U.S. dollar: http://www.prisonplanet.com/central-banks-start-to-abandon-the-u-s-dollar.html

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