Skip to comments.China and Brazil sign $30bn currency swap agreement
Posted on 04/01/2013 8:06:11 PM PDT by Lorianne
China and Brazil have signed a currency swap deal, designed to safeguard against future global financial crises.
The pact, first announced last year, will allow their central banks to swap local currencies worth up to 190bn yuan or 60bn reais ($30bn; £20bn).
Officials said this will ensure smooth bilateral trade, regardless of global financial conditions.
Along with being the world's second-largest economy, China is also Brazil's biggest trading partner.
"If there were shocks to the global financial market, with credit running short, we'd have credit from our biggest international partner, so there would be no interruption of trade," said Guido Mantega, Brazil's economy minister.
The agreement was signed on the sidelines of the fifth Brics (Brazil, Russia, India, China and South Africa) summit being held in Durban, South Africa.
Continue reading the main story Start Quote The purpose of this swap is that, independent of the conditions prevailing in the international financial market, we will have $30bn available End Quote Alexandre Tombini
Governor, Brazil Central Bank
'Guarantee normal trade'
Trade between China and Brazil has grown robustly over the past few years, with volumes rising from $6.7bn in 2003 to nearly $75bn in 2012.
A large chunk of this growth has been driven by growing Chinese demand for Brazil's resources, such as iron ore and soy products.
Meanwhile, Brazil has also become a key export market for goods manufactured in China.
(Excerpt) Read more at bbc.co.uk ...
A Ping for your thoughts - - - .
Well, gee. It’s not like the world currency is going to collapse . . I mean as long as we have paper and ink and stuff.
This is how they bypass using the US dollar in trade. If you get more and more of these trade agreements then the US dollar becomes less needed in world trade. We get a huge free advantage from printing up US dollars the other nations use to conduct trade
Here comes the China Whale trades. Let’s see if anyone notices. Calling JP Morgan. You’re needed on the swap trade floor.
Yep, that’s the way I read it.
Australia recently announced it was looking into direct trade with China. The currency swappers are going to have a field day trading Brazilian reals/Aussie dollars/Chinese yuan the moment there is a differential trading rate among them.
George Soros is a very happy man today.