China, Brazil strike deal to ditch dollar for trade

• China and Brazil have reached a deal to trade in their own currencies, ditching the USD as an intermediary, the Brazilian government said on 29 Mar, Beijing’s latest salvo against the almighty greenback.
• The deal will enable China, the top rival to US economic hegemony, and Brazil, the biggest economy in Latin America, to conduct their massive trade and financial transactions directly, exchanging CNY for BRL and vice versa instead of going through the USD.
• “The expectation is that this will reduce costs… promote even greater bilateral trade and facilitate investment,” the Brazilian Trade and Investment Promotion Agency (ApexBrasil) said in a statement.
• China is Brazil’s biggest trading partner, with a record USD150.5bn (SGD200bn) in bilateral trade in 2022.
• The deal, which follows a preliminary agreement in Jan 23, was announced after a high-level China-Brazil business forum in Beijing.

External Link : https://www.straitstimes.com/world/china-brazil-strike-deal-to-ditch-dollar-for-trade