Sistema de Pagamentos em Moeda Local
Encyclopedia
SML, Sistema de Pagamentos em Moeda Local (en: Local Currency Payment System)
The SML was established on October 3, 2008. It allows that payment orders are paid and received in local currency. Initially, the SML was used only in transactions between Brazil
and Argentina
, but recently Brazilian Central Bank is studying the expansion of the system to other countries like Uruguay
and Paraguay
. More countries, like Russia
, India
and China
have shown interest in adopting the system in bilateral trade with Brazil.
Senders and recipients have the option of paying or receiving payment in their own local currency. This supposedly makes life easier for small producers, which until then were used to sell and buy goods only in their own currencies. They don’t have to fix their prices in US-Dollars or calculate exchange-rates their own currency and the currency of the other country, intermediating with the US-dollar.
The system includes by the central banks authorized financial institutions. Transactions are made between the financial institutions and the Central Banks. The importers and exporters fix their prices using the SML-rate published by the Central Banks.
In the first year brazilians and argentines only used the SML in transactions involving goods, but central banks are considering enable operations of trade in services and payments of social benefits.
The SML was established on October 3, 2008. It allows that payment orders are paid and received in local currency. Initially, the SML was used only in transactions between Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
and Argentina
Argentina
Argentina , officially the Argentine Republic , is the second largest country in South America by land area, after Brazil. It is constituted as a federation of 23 provinces and an autonomous city, Buenos Aires...
, but recently Brazilian Central Bank is studying the expansion of the system to other countries like Uruguay
Uruguay
Uruguay ,officially the Oriental Republic of Uruguay,sometimes the Eastern Republic of Uruguay; ) is a country in the southeastern part of South America. It is home to some 3.5 million people, of whom 1.8 million live in the capital Montevideo and its metropolitan area...
and Paraguay
Paraguay
Paraguay , officially the Republic of Paraguay , is a landlocked country in South America. It is bordered by Argentina to the south and southwest, Brazil to the east and northeast, and Bolivia to the northwest. Paraguay lies on both banks of the Paraguay River, which runs through the center of the...
. More countries, like Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
, India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
and China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
have shown interest in adopting the system in bilateral trade with Brazil.
Senders and recipients have the option of paying or receiving payment in their own local currency. This supposedly makes life easier for small producers, which until then were used to sell and buy goods only in their own currencies. They don’t have to fix their prices in US-Dollars or calculate exchange-rates their own currency and the currency of the other country, intermediating with the US-dollar.
The system includes by the central banks authorized financial institutions. Transactions are made between the financial institutions and the Central Banks. The importers and exporters fix their prices using the SML-rate published by the Central Banks.
In the first year brazilians and argentines only used the SML in transactions involving goods, but central banks are considering enable operations of trade in services and payments of social benefits.