China and Brazil agree to abandon the US dollar in their bilateral trade
The Brazilian government announced on Wednesday that they reached an agreement with China to abandon the use of the US dollar and use their own local currencies in their bilateral trade dealings.
The agreement will allow China, the biggest rival to US economic dominance, and Brazil, the largest economy in Latin America, to conduct their massive trade deals directly and exchange the yuan for the real and vice versa, instead of relying on the US dollar.
“There are expectations that this will reduce costs, and further promote bilateral trade and facilitate investment,” the Brazilian Agency for the Promotion of Trade and Investment (ApexBrazil) said in a statement.
China is Brazil’s largest trading partner, with trade exchange between them amounting to about $150 billion last year.
The agreement was announced during a high-level China-Brazilian business forum in Beijing, and follows an initial agreement in January.
Brazilian President Luiz Inacio Lula da Silva was due to attend the forum, but had to postpone his visit to China after contracting pneumonia.
Officials said the Industrial and Commercial Bank of China and BBM Bank would carry out the transactions.
China also abandoned dealings in US dollar with Russia, Pakistan and several other countries.