BRASILIA - Brazil aims to make its currency, the real, fully convertible within two to three years, central bank President Roberto Campos Neto said on Wednesday, in an effort to lower the cost of cross-border trade and investment.

Speaking to reporters as he unveiled a range of proposals to simplify regulations and make financial markets more flexible and accessible, Campos Neto said the monetary authority will propose changes to exchange rate legislation in the near future.

The reform agenda presented by Campos Neto promises to boost credit for small businesses and farmers, increase financial transparency, enhance digital financial oversight, improve communications with foreign investors and educate Brazilians.

All this will help make it easier and cheaper to do business in Brazil, said Campos Neto, who took office on Feb. 28. Among his priorities is making the real a fully convertible currency, reducing barriers on foreign exchange to make it a reference currency for South America.

“A convertible currency opens up the potential for much greater (economic and financial) stability. There’s great demand from neighboring countries for accounts in reais here. Brazil is a huge part of GDP in the region,” Campos Neto said.

Campos Neto said the financial barriers, bureaucracy and business costs in Brazil were too high and must be reduced so the country can compete in a world of global supply chains.

Brazil’s banking spreads — the difference between the rate at which banks borrow and lend — is on average four times higher than it is in emerging market economies with comparable inflation, interest rate and default rate dynamics, he said.

Campos Neto also said the central bank will look at ways of improving the management of its foreign exchange reserves, which currently stand at around $385 billion — part of a “micro agenda” as opposed to a “macro agenda”.

 “What is being discussed here is not whether we want reserves or what they are used for. What is being discussed is the process of managing reserves differently, using the appropriate instruments,” Campos Neto said.

Bruno Serra, the bank’s monetary policy director, said the central bank cut the allocation of its FX reserves in commodity-linked currencies late last year.

“Managing reserves is based on reviewing the allocation, not the level,” Serra said.