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President of Brasil, Dilma Rousseff and Chinese premier Wen Jiabao. [Getty Images
Brazilian Central Bank President Alexandre Tombini and People’s Bank of China Governor Zhou Xiaochuan finalised the terms of the agreement in Basel on Sunday.
This agreement looks to boost trade and investments between the two member countries of the BRICS bloc.
The deal will work for the two countries like a credit line, according to the central bank spokeswoman.
She said details such as maturities and interest rates will be defined in the next few weeks.
China is Brazil’s largest trading partner–the Brazilian government recently predicted China will become its largest source of imports this year.
In 2011, Brazil, the largest economy in Latin America, surpassed the United Kingdom to become the world’s sixth largest economy.
It is expected to be the world’s third-largest automobile market by 2015.
The value of China-Brazil trade is expected to surpass $80 billion this year, according to Chinese Government estimates.
Earlier in June 2012, the BRICS bloc had advocated currency swap among the 5 countries which allow the nations’ central banks to lend to each other money to keep markets liquid, and the pooling of foreign-exchange reserves as contingency measures aimed at containing crises such as the one rocking the eurozone.
TBP with inputs from Agencies
