BRASILIA, Sept 9: The presidents of Brazil and Argentina signed a deal that will let their two countries dispense with converting transactions into dollars when they trade.

“We are making the first step towards future regional monetary integration.

We will soon see the first results with costs being cut,” Brazil’s Luiz Inacio Lula da Silva told a joint media conference in Brasilia. The accord is important for Mercosur, the South American trading bloc comprising Argentina, Brazil, Uruguay, Paraguay and soon, if plans are agreed, Venezuela.

Argentina and Brazil’s exchanges currently account for 80 per cent of the trade in Mercosur.Last year, the cross flow amounted to $25 billion, and it was expected to top $30 billion this year.

Argentine President Cristina Kirchner said the deal will allow exporters and importers in both countries to make transactions in the Argentine peso and the Brazilian real.

“It’s not only an economic issue, but also a fundamentally cultural one,” she said.Argentina said the deal would come into force on October 3.

Brazil’s central bank said it would allow “the elimination of an outside currency in direct transactions between businesses” in the two countries and do away the need for foreign currency transaction authorisations. —AFP