Photo: Palacio do Planalto Flickr.
According to a report by Watcher Guru, Brazil and the People's Republic of China, two member nations of the BRICS group, have agreed that payments resulting from trade relations between both countries will be made in their respective local currencies, with the aim of reducing dependence on the U.S. dollar.
This decision comes amid the ongoing trade conflict between China and the United States, in which, due to the high tariffs imposed by Washington, China recently responded by placing a 34% tariff on products imported from the U.S. In response, several countries have voiced their discontent with the American president's policies and have sought alternatives to the dollar in an effort to protect their economies.
In this context, China also announced it will restrict domestic companies from investing in the United States, a move that could slow the American economy due to reduced inflows of Chinese capital.
Brazil’s Secretary of the Ministry of Finance, Tatiana Rosito, stated that her country supports this new payment model using local currencies. She also emphasized that trade between the two nations is expected to increase, and assured that Brazil will not present any obstacles to the implementation of this mechanism.
The secretary further noted that this strategy, in addition to reducing U.S. influence in commercial transactions, will help lower foreign exchange costs—an outcome that would benefit the economies of BRICS member states.
Moreover, she confirmed that there is potential for an alliance with the New Development Bank, which currently supports BRICS nations through local currency funding. This initiative reflects the bloc’s aspiration to play a more prominent role in reshaping global financial and economic development.
Main Source:
BRICS: China & Brazil Officially Announce to Trade in Local Currencies – Watcher.Guru
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