On March 29 local time, the Brazilian Ministry of Foreign Affairs quoted a statement from the Brazilian Trade and Investment Promotion Agency announcing that China and Brazil had reached an agreement to no longer use the US dollar as an intermediate currency, but to conduct trade in their own currency. The dynamics of financial cooperation between China and Brazil has attracted widespread attention from the international community.
The deal will allow China and Brazil, Latin America's largest economy, to conduct large-scale trade and financial transactions directly. It is understood that the agreement was announced after the China-Pakistan high-level business forum held in Beijing. In January this year, the two sides reached a preliminary agreement on this.
According to the agreement, foreign trade and financing operations between China and Brazil can be carried out by converting the real into yuan and vice versa, thus avoiding the conversion of real into dollars in transactions.
"This is expected to reduce costs ... and facilitate bilateral trade and investment," Brazil's Export Investment Promotion Agency said in a statement.
On March 29, Jorge Viana, director of the Brazilian Export Investment Promotion Agency, spoke at a business seminar held in Beijing
It is conducive to cross-border capital flow and macroeconomic stability, and is also conducive to the internationalization of the currencies of both parties
Wang Jinbin, executive deputy secretary of the Party Committee of the School of Economics at Renmin University of China and a major member of the China Macroeconomic Forum (CMF), told Shell Finance that the use of local currency settlement in bilateral trade is actually an important basis for currency internationalization. China and Pakistan agree to use their own In fact, it is beneficial to the internationalization of both currencies.
This is an important manifestation of currency multipolarization under the background of multipolarization of the world economic structure. In particular, the use of local currency for trade settlement between major trading countries is an internal demand for facilitating economic and trade relations between each other. For currency multipolarity has an important role in promoting.
In addition, trade settlement between major trading countries in the two countries' local currencies reduces the dependence on third-party currencies or on a single currency, which is beneficial to the stability of the entire macro economy. When a country's currency reserves are diversified, its cross-border capital flow will be less affected by a single currency, which is also conducive to cross-border capital flow and macroeconomic stability.
In addition, trade settlement between major trading countries in the two countries' local currencies reduces the dependence on third-party currencies or on a single currency, which is beneficial to the stability of the entire macro economy. When a country's currency reserves are diversified, its cross-border capital flow will be less affected by a single currency, which is also conducive to cross-border capital flow and macroeconomic stability.
