The central banks of China and Brazil have reached an agreement to establish an offshore clearinghouse, which is designed to facilitate the abandonment of the US dollar in bilateral trade. This was announced at the Sino-Brazilian business forum in Beijing, Vice Minister of Commerce of the People’s Republic of China Guo Tingting. His words son Brazilian newspaper Folha de Sao Paulo.
“An agreement has been signed with Brazil on payment in yuan, which greatly facilitates our exchanges,” Tintin said.
According to him, Beijing and Brasilia intend to expand cooperation in the areas of food and minerals, as well as develop mutual trade.
According to the Secretary for International Affairs of the Brazilian Ministry of Finance, Tatiana Rosito, the use of a new financial instrument will reduce conversion costs. She explained that it is now possible to directly exchange yuan for reals instead of first converting them to US dollars. Rosito also pointed out that 25 countries, including Chile and Argentina, are already making deals with China in yuan.
Folha de Sao Paulo notes that the clearing center will settle transactions and loans in national currencies. The purpose of the agreement between China and Brazil, the publication calls for getting rid of dollar dependence in bilateral relations.
At the same time, the newspaper claims that Brazilian businessmen accepted the information about the creation of a new financial mechanism “without much enthusiasm”. “At least it’s better than common currency with Argentina quipped one of the leaders of the Brazilian agro-industrial company, who was present at the agreement ceremony in Beijing.
As Folha de Sao Paulo points out, China has been Brazil’s largest trading partner since 2009. Between 2005 and 2022, China has invested more than $63 billion in the South American state. China is also the most Brazil’s largest export market, accounting for more than a third of all exports. According to official statistics, trade between the countries in 2022 hit a record high of $150.5 billion.
Earlier, Russian President Vladimir Putin announced that Russia is ready to switch to using the Chinese yuan in its trade with countries in Asia, Africa and Latin America in the future.
