The governments of Brazil and China are due Tuesday in Durban, South Africa, to sign a currency swap agreement to protect two-way trade from exchange rate risks, Brazilian news agency Estado reported.
The agreement will be signed by representatives of the Brazilian Central Bank and the People’s Bank of China, at a session held alongside the fifth meetings of the emerging BRICS countries – Brazil, Russia, India, China and South Africa.
The agreement outlines an initial amount of US$30 billion, which represents 40 percent of two-way trade, which in 2012 totalled US$75 billion.
In June 2012, Brazil and China announced, at the Rio+20 summit, in Rio de Janeiro, a memorandum of understanding to set up a swap mechanism for their national currencies.
The agreement that is due to be signed Tuesday is the conclusion of that process, and the mechanism is expected to be in place in the second half of the year. (macauhub)