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Brazil, China sign deal to trade in own currency
March 26, 2013, 11:51 am

[Getty Images]

The two countries want to carry out trade using local currency [Getty Images]

In a major boost to economic ties between the two countries, China and Brazil have signed a new bilateral accord to use their national currencies in bilateral trade in a deal that will cover the equivalent of up to $30 billion in trade exchanges per year, for three years.

This announcement comes ahead of a crucial meet of the five heads of state in Durban tomorrow.

The deal was inked by the Chinese and Brazilian central bank governors and finance ministers in Durban on Tuesday.

Brazilian President Dilma Rousseff is going to meet with her BRICS counterparts in Durban.

Brazil has asserted that China is a key partner for the Latin American economy.

“Brazil and China are working to allow trade between countries to be carried out in local currency to protect from dollar fluctuations,” said Fernando Pimentel, Brazil’s minister of development, industry and foreign trade.

“China is our biggest trade partner. We would like to improve our export portfolio to China,” he added.

Pimentel had last Thursday urged the International Monetary Fund (IMF) to modernise its governance structure, saying that “developing countries should have a more important role in the organisation’s governance system.”

“Developing countries as a whole, and on that the Brics are, of course, countries of highlight, should have a more permanent role on the IMF’s governance,” the Brazilian minister said

Brazil hopes for positive outcomes at the upcoming BRICS summit as the five-nation bloc is expected to reach a variety of agreements to promote multilateral cooperation and strategic partnership, noted Pimentel.

“Brics is an economic and a diplomatic bloc which has consolidated more and more at each summit it has had and each year that it has lasted, and we believe that it is now a permanent economic bloc in the international arena,” the minister said.

The BRICS Post

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