Brazil and China trade using national currencies for the first time

It has been reported that Brazil and China conducted transactions in their own national currencies for the first time yesterday in their bilateral trade.

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Brazil and China trade using national currencies for the first time

It has been announced that Brazil and China conducted transactions in their own national currencies for the first time yesterday in their bilateral trade. According to a report by the Venezuela-based website Telesur, with the payment received in China's national currency, the yuan, being converted directly into the Brazilian real as part of the bilateral trade, the two countries used their national currencies for the first time.

In a statement made by the Bank of China's branch in Brazil, the financial transaction was announced as "historic."

The statement noted that the transaction was made for the purchase of pulp from a company named "Eldorado Brasil," which has a representative office in the Chinese city of Shanghai.

LARGEST TRADING PARTNER

In reports on the subject in the Brazilian press, it was suggested that other Brazilian pulp exporting companies would also trade with China in local currencies. China and Brazil reached an agreement on March 30 to use their national currencies, the yuan and the real, instead of the US dollar in their trade with each other.

China is currently Brazil's largest trading partner. The trade volume between the two countries exceeded 150 billion dollars last year.

ARGENTINA AND BOLIVIA WERE ALSO USING THE YUAN

Argentine President Alberto Fernandez and his Brazilian counterpart Luiz Inacio Lula da Silva pledged in May to work together to create a new mechanism to avoid using the US dollar in trade with each other and with neighboring countries.

Argentine Minister of Economy Sergio Massa announced on April 27 that his country had reached an agreement with China to pay for imports exceeding 1 billion dollars to China in yuan.

Bolivia also announced on July 28 that it had begun using the yuan instead of the US dollar in trade with neighboring countries. Dilma Rousseff, the former President of Brazil and head of the international New Development Bank of BRICS—which consists of Brazil, Russia, India, China, and South Africa—stated the following as soon as she took office:

"Why should all countries have to conduct their trade tied to the dollar? Why can't we trade in our own currencies? Who decided that it should be the dollar?"

Experts believe that the reason for using the yuan instead of the dollar in trade in South America and the Caribbean is the "desire of these countries to build stronger ties with China and their goal of reducing their dependence on the dollar."

News Source: AA