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Brazil's central bank on Monday sent a bill to Congress which aims to modernize, simplify and increase the flexibility of the country's foreign exchange market, and by extension make it easier and more attractive to do business in Brazil.

Central bank chief Roberto Campos Neto has made it one of his priorities to reduce barriers to cross-border business, make it cheaper and easier to move money in and out of Brazil, and ultimately make the real a fully convertible currency.

In a press release on Monday, the central bank said the bill consolidating more than 40 legal provisions dating back to 1920 into one single law will improve Brazil's business environment and be "a fundamental step towards convertibility of the real."

The bill, whose text says will come into effect within a year, will update forex regulations and make them more relevant to the more open, modern, complex and globalized economy for everyone, from individuals to global investment banks.

Ultimately, the changes will also help pave the way for foreign currency accounts to be opened in Brazil.

"Once approved by Congress, opening foreign currency accounts in Brazil will be conducted gradually and prudently, in line with the process of strengthening Brazil's economic and financial fundamentals," Campos Neto and Economy Minister Paulo Guedes said in a joint statement.

According to the central bank, the bill will slash bureaucratic tape for companies needing foreign exchange for import and export, and will end restrictions on exporters' use of their overseas revenues.

The central bank also said the bill aims to ease conditions placed on foreign investment in Brazil as well as on Brazilian investments abroad, and make it cheaper and easier to send money to and from the country. Foreign exchange market participants gave a lukewarm reaction to the announcement, which had been widely flagged all year. "It's marginally positive," said the head of trading at one bank.

Copyright Reuters, 2019

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