Macau, China, 16 Sept – Brazil and China have created a working group to analyse the feasibility of implementing a bilateral trade programme in their respective currencies in order to replace the US dollar, a source from the Brazilian Central Bank told Portuguese news agency Lusa Tuesday.
“The negotiations are still at an initial stage, and a working group has been created with representatives from Brazil and China who have so far had just one meeting during the G20 in London,” the source said.
The next step could be to send a delegation from the Brazilian Central Bank to China, he added.
The working group will analyse the “results that are being achieved with an agreement that China recently established with Argentina,” the first South American country to benefit from trade in the respective currencies with China and with which Brazil has also been implementing the same programme since September 2008.
The central banks of China and Brazil also plan to “survey the potential volume of bilateral trade to check the feasibility of a future agreement.”
An agreement with China is expected to essentially benefit small exporters by reducing costs, whilst large imports are likely to continue using the US dollar.
So far only companies from the ten countries in the Association of Southeast Asian Nations are authorised to trade in Chinese renmimbi with companies from five cities on the Chinese mainland, Hong Kong and Macau, as part of a pilot programme that was launched in July and involves a total of 400 companies.
In April China overtook the United States to become Brazil’s biggest trade partner and, meanwhile, has also become the main destination for its exports, mainly iron, oil, grains and pulp for papermaking. (macauhub)