Brazil and China agree to stop using the dollar. Reports say that the two BRICS countries will now trade in their own currencies.
Beijing and Brasilia have signed a deal to trade in their own currencies instead of the US dollar. They also want to work together more on food and minerals.
According to news reports, the deal will allow the two BRICS members to exchange renminbi for real and real for renminbi instead of using the US dollar to settle trade and financial deals.
The Brazilian Trade and Investment Promotion Agency told AFP on Wednesday that they hope this will lower costs, increase bilateral trade, and make it easier to invest.
The countries are also said to have agreed to set up a clearinghouse that will let them settle debts without using US dollars and lend money in their own currencies. The goal of the move is to make transactions between the two countries easier and cheaper and to get them off of the dollar.
The People’s Bank of China (PBOC) said earlier that this will increase the use of the renminbi for cross-border transactions between businesses and financial institutions in the two countries and make trade and investment between the two countries easier.
China has been Brazil’s biggest trading partner for more than a decade, and last year, the two countries’ trade reached a record $150 billion.
Tatiana Rosito, who is in charge of international affairs at Brazil’s Ministry of Finance, says that 25 countries are already paying China in yuan.