According to AFP and several foreign media on 30th Mar, "Brazil has reached an agreement with China to move away from using the US dollar as an intermediary currency and settle trade in its own currency", the Brazilian government said on Wednesday.The report described it as Beijing's "latest surprise attack" on the dollar.
The report said, the agreement allows China-the top rival of United States' economic supremacy, and Brazil-the largest economy of Latin America, to conduct large-scale trade and financial transactions directly, exchanging RMB for real and vice versa, not the dollar.
"This is expected to reduce costs while promoting greater bilateral trade and facilitating investment", the Brazilian agency for the Promotion of Trade and Investment said in a statement , and China is known to have similar agreements with Russia, Pakistan and other countries also.
According to the latest data, China is Brazil's largest trading partner, accounting for more than a fifth of its imports, followed by the United States, AP reported. And China is Brazil's largest export market also, accounting for more than a third exports of total. Bilateral trade between China and Brazil reached a record 150.5 billion dollars last year.Today, Brazil is the largest recipient of Chinese investment in Latin America, mainly in high-voltage transmission lines and oil extraction.
According to a post on the People's Bank of China website on Feb, the People's Bank of China (PBOC) and the Central Bank of Brazil signed a memorandum of cooperation on establishing RMB clearing arrangement in Brazil recently.The establishment of the RMB clearing arrangement in Brazil will help Chinese and Brazilian enterprises and financial institutions use RMB for cross-border transactions and further promote bilateral trade and investment facilitation.