Today Argentina and Brazil will drop the US dollar for commercial exchange between the two South American markets. Imports and exports will be carried out in Argentine pesos and the Brazilian real with an exchange rate that will be published daily by the central banks of both countries. This new system starts next Monday.

The legislation is an effort to move away from exchange fees associated with the dollar.

This from Mercopress:

Central banks [in Argentina and Brazil] won’t be charging the private entities clearing fees and deals will be agreed on the reference exchange rate to be fixed on a daily basis.

Another cost saving will be elimination of the commission normally charged by corresponding banks in New York that act as intermediaries.

However at this stage the system is voluntary so as not to force the private sector and if companies wish to return to the US dollar system they can.

This could be the first step to create a common currency among the Mercosur countries, Argentina, Brazil, Paraguay and Uruguay.