An official in charge of currency settlement at the Argentine Central Bank said Saturday, that Argentina and Brazil are to scrap bilateral commercial transactions in U.S. dollars and start using their own currencies from August – according to news agency Xinhua .
Under the new system, which is aimed at reducing costs in commercial transactions and would benefit small and medium-sized enterprise ; there will be a unified exchange rate between the real and peso, the so-called reference rate.
It will be applied by Brazilian and Argentine central banks at the end of each day.
Brazilian President Luiz Inacio Lula da Silva reached an agreement to establish a new payment system with his Argentine counterpart Cristina Fernandez de Kirchner during his visit to Argentina in February.
Brazil is Argentina’s largest trading partner, while Argentina is Brazil’s second-biggest trading partner after the United States.
Bilateral trade during 2007, stood at more than 23 billion U.S. dollars.