The Brazilian government said on Wednesday that they have struck a deal with China, their biggest trading partner, to trade in their own currencies, ceasing the use of the US dollar as an intermediary, according to The Straits Times.
This event gives China and Brazil access to direct trade and financial transactions. China is the main rival to the USA´s economic strength and Brazil is the strongest economy in Latin America.
This deal follows a preliminary agreement in January, was announced after a high-level China-Brazil business forum in Beijing took place. Brazilian President Luiz Inacio Lula da Silva was indisposed with pneumonia and did not attend.
China is Brazil’s biggest trading partner, with a record US$150.5 billion (€138.3 billion) in bilateral trade last year.
In this reciprocal exchange of yuan for reais, the Brazilian Trade and Investment Promotion Agency (ApexBrasil) said in a statement: “The expectation is that this will reduce costs… promote even greater bilateral trade and facilitate investment.”
The Industrial and Commercial Bank of China and Bank of Communications BBM will execute the transactions, officials said.
China has similar currency deals with Russia, Pakistan and several other countries.
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