China must make compensation agreement in yuan in Brazil – 02/07/2023 – Market

The central banks of China and Brazil have signed a memorandum of understanding to establish clearing arrangements in yuan in Brazil, the People’s Bank of China said on Tuesday (7), in a move to help boost the Chinese currency’s global influence. .

Establishing these arrangements for the yuan will be beneficial for international transactions and promote bilateral trade and investment facilitation, the Chinese central bank said.

In recent months, China has signed similar yuan compensation agreements with Pakistan, Kazakhstan and Laos.

Bilateral trade between China and Brazil reached US$172 billion (R$889 billion) in 2022, according to Chinese customs data.

China has been trying to boost the yuan globally since 2009 to reduce reliance on the dollar in trade and investment deals and challenge the dollar’s role as the world’s main reserve currency.

When contacted, the Brazilian Central Bank did not immediately respond to requests for comment.