On the afternoon of July 9, Brazilian President Luiz Inacio Lula da Silva, who is visiting Bolivia, said at the closing ceremony of the business forum between the two countries that after Bolivia joins the Southern Common Market (MERCOsur), it will join MERCOsur's "local currency payment system" to reduce transaction costs and reduce reliance on US dollar payments.
The Local Currency Payment System (SML) is an agreement between MerCOsur member states to settle bilateral trade in their own currencies. In February 2009, Mercosur ratified the agreement. The implementation of the trade local currency settlement system will weaken the status of the US dollar in regional trade, help to reverse the trend of "dollarization", and will also reduce the cost of trade settlement of member states, thus vigorously promoting the process of financial integration in South America.
On March 26, 1991, the Presidents of Argentina, Brazil, Paraguay and Uruguay signed the Treaty of Asuncion in the Paraguayan capital, announcing the establishment of the Latin American regional integration organization MERCOsur. The treaty entered into force on November 29 of that year. On January 1, 1995, Mercosur was officially inaugurated. The organization aims to improve people's living conditions and promote economic integration in Latin America by effectively utilizing resources, protecting the environment, coordinating macroeconomic policies, strengthening economic complementarity, promoting scientific and technological progress and economic modernization of member countries. On July 8 of this year, Bolivia completed all the legal procedures for joining MERCOsur.
