China and Brazil abandon dollar for trade


Published 30 March 2023 at 09.23

Economics. Brazil and China have reached an agreement to exchange the US dollar for their own currencies in trade transactions.

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The agreement will allow China and Brazil to carry out trade and financial transactions directly by exchanging yuan for reais instead of first converting their currencies to the US dollar.

Brazilian trade and investment promotion agency ApexBrasil says the new agreement is expected to “reduce costs” and “promote even greater bilateral trade cooperation and facilitate investment”.

In practice the deal will also reduce US influence in the world economy, as two of the world's largest countries now make each other independent of the dollar.

According to the latest figures, China is Brazil's largest trading partner, accounting for more than a fifth of all imports, followed by the United States. China is also Brazil's largest export market and accounts for more than a third of all export goods.