Reuters: US Dollar Report: Brazil central bank's new system aims to cut FX costs

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Brazil central bank's new system aims to cut FX costs Jul 3rd 2012, 22:20 Tue Jul 3, 2012 6:20pm EDT * New system to cut foreign exchange registration costs * Banks started to use new central bank system on Monday BRASILIA, July 3 (Reuters) - Brazil central bank's new system of exchange operations should slash the cost that banks pay to register foreign currency operations between them, the central bank's executive secretariat said on Tuesday. Secretariat Geraldo Magela Siqueira told Reuters that the registration cost for interbank foreign exchange operations should drop to about 1.7 million reais ($849,300) per year from 6 million reais under the old system. When adding the primary market, which includes exchange operations by exporters, importers and travelers, the overall cost would drop to 17 million reais per year from 60 million, Siqueira said. "This improves efficiency, lowers risks and increases the agility of the system. Everybody wins," said Siqueira. The new System of Integrated Registry of Exchange Operations lowers costs by limiting the amount of contracts needed to carry out the transactions and improving technology to reduce the costs related to traffic of information. Banks started to register foreign exchange purchases and sales contracts in the new system on Monday, reaching 2,100 operations worth around $4.5 billion that first day, Siqueira said. The system started to register primary market transactions in October of last year. With the new system the central bank aims to lower the overall costs of foreign exchange transactions by importers, exporters and tourists, Siqueira said. Link this Share this Digg this Email Reprints

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