SML - Local Currency Payment System

 

Brazil - Argentina


Operation


summarized procedure - summarized operation cycle
statistics


In a operational view, the interaction among the Central Banks and the financial institutions that join SML, and of the latter with the importers and exporters, will occur in their own local currencies, both for exports and imports.

SML will be called upon by the importer, who should register the transaction and set the payment in his own currency through a participating financial institution.

From this on, there will be a bilateral netting involving concerning local currencies between Central Banks. After the compensation, Central Banks will credit the exporters through the banking system.


Summarized Procedure:

By the importer:

  • The importer should seek a participating financial institution in order to register the transaction and make the payment.

  • This payment may be made based on a exchange rate negotiated with the financial institution or on the SML rate published at the end of the day.

By the exporter:

  • The exporter provides his account number ando other bank information to the importer, in order to start the operation in the SML.

  • After the transaction is concluded, the exporter will have credited the related amount, in his bank account.

Summarized Operation Cycle:

On the first day (day of registration of operation - D+0):

  • The importers are supposed to report to a financial institution in order to register the operation at SML. The transaction will be registered in the exporter’s local currency (the Brazilian importers will register the transaction amount in Argentinean pesos).

  • The financial institution may establish a peso/real exchange rate at this moment or can choose to apply the SML rate, published in the end of the day.

  • Each Central Bank, after verifying the information, arranges the registered operations and informs its counterparty.

  • After 6:00 pm, the SML rate is published, compounded by the “Reference Rate” from BCRA (Argentinean Peso/US Dollars) and “PTAX” from BCB (Real/ US Dollars).

On the second day (D+1):

  • The Central Bank of Brazil debits the bank reserves account of the Brazilian financial institution with registered import operations, by the amount in reais corresponding to the multiplication of the total amount registered in pesos by the SML rate.

  • The Brazilian import transactions are consolidated and those that were not paid are eliminated and informed to BCRA, which adopts the same procedures in relation to the Argentinean exports. In this manner, the total balance to be netted is calculated, based on the SML rate.

On the third day (D+2):

  • Once the receipt of payments in New York is confirmed by the creditor, the credit amount is given to its exporters, in its own local currency.


Statistics:

 

               Exports               Imports*

Month

Number of
  Operations  
     Amount(R$) Number of
  Operations  

    Amount(R$)

 oct/083 156.335,66 --
 nov/0812 2.085.785,61367.298,69
 dec/0818 7.650.979,1271.246.543,37
 jan/0926 7.246.868,99173.135,89
 feb/0929 3.269.443,363166.148,19
 mar/0942 9.635.274,6110467.826,85
 apr/0962 46.094.463,285106.396,53
 may/0967 29.182.281,665203.973,24
 jun/0982 27.072.890,258248.540,06
 jul/09109 26.190.655,676210.999,13
 aug/09125 32.033.883,3910623.424,53
 sep/09137 74.613.778,095266.423,72
 oct/09170 61.442.493,418325.170,66
 nov/09176 72.636.459,107302.514,92
 dec/09168 64.069.111,5751.322.164,84
 jan/10198 68.890.937,32 3177.666,33
 feb/10201 77.970.144,883239.041,16
 mar/10253 95.609.046,612125.571,84
 apr/10222 85.376.527,974141.843,79
may/10249 68.861.024,5343.430.920,03
 jun/10224158.091.405,833125.900,75
jul/1026781.896.438,724300.540,92
 aug/10320102.511.448,415177.683,71
sep/10327117.570.724,841456.431,10
oct/10370111.404.638,2451.111.905,97
nov/10415156.447.770,45116.943,59
dec/10364138.465.820,0762.778.265,86
jan/11381117.880.706,874648.033,13
feb/11322137.816.979,78125.603,11
mar/11329119.783.948,095650.072,24
apr/11399116.782.724,592357.151,76
may/11465 150.228.712,1731.516.804,93
jun/11397151.589.937,331188.290,12
jul/11420119.831.358,203582.921,31
aug/11443148.495.650,484248.985,62
sep/11496154.304.633,404241.231,95
oct/11435124.968.922,435651.039,19
nov/11424121.543.850,945479.735,61
dec/11462177.722.569,31133.147.026,72
jan/12440148.506.826,29141.714.195,93
feb/12390122.702.651,3183.048.076,45
mar/12478154.784.771,073273.429,61
apr/12376100.720.709,92101.927.062,49
may/12548192.078.795,2072.470.529,53
jun/12551199.347.464,52111.004.961,12
jul/12603199.955.902,8593.815.191,65
aug/12747257.702.069,637898.988,70
sep/12711178.153.583,075413.414,08
oct/12992247.571.419,744578.973,61
nov/12834271.349.931,043 692.081,60
dec/12774209.112.229,092408.394,96 
jan/13800232.645.481,152418.971,76
feb/13554147.450.849,422343.442,27
mar/13614170.481.924,104638.565,60
apr/13879246.988.286,704 833.800,45
may/13843194.700.654,825 833.777,73
jun/13659176.323.550,332 623.295,04
jul/13880217.272.814,987 810.314,62
aug/13755236.664.537,427 1.757.670,44
sep/13802258.508.554,524 1.254.102,55
oct/13894235.780.758,684 1.527.181,05
nov/13741236.513.901,832 537.433,62
dec/13646229.884.136,274 947.088,42
jan/14726199.269.422,453 934.215,59
feb/14539145.585.454,646 1.015.441,86
mar/14588137.246.213,243 528.320,24
apr/14753190.424.061,283 147.570,30
may/14737209.394.029,014 1.121.386,82
jun/14687200.181.329,143 245.361,48
jul/14879238.521.225,592 136.573,43
aug/14738150.705.065,724 276.283,54
(*) The value of imports is the sum of SML transactions, which is set in Argentinean pesos, was converted to reais using the SML rate. This is the amount charged from the financial institutions.