Brazil, China Sign Pact to Abandon Dollar

Beijing and Brasilia signed an agreement on trade in mutual currencies, abandoning the US dollar as an intermediary, and are also planning to expand cooperation in the field of food and minerals.

According to media reports, the deal will enable the two BRICS members to conduct their massive trade and financial transactions directly, exchanging renminbi for real and vice versa instead of using the greenback for settlements, RT reported.

“The expectation is that this will reduce costs... promote even greater bilateral trade and facilitate investment,” AFP quoted the Brazilian Trade and Investment Promotion Agency as saying on Wednesday.

The countries also reportedly announced the creation of a clearinghouse that will provide settlements without the use of the US dollar, as well as lending in national currencies. The move is aimed at facilitating and reducing the cost of transactions between the sides, and getting rid of dollar dependence in bilateral relations.