Recently, some countries began to use their local currencies in trade with each other. It is true that there was no trade union between these countries, but these movements began to increase. This topic will shed light on some of these countries:
China, Brazil strike deal to ditch dollar for tradeBRASILIA - China and Brazil have reached a deal to trade in their own currencies, ditching the United States dollar as an intermediary, the Brazilian government said on Wednesday.
The deal, Beijing’s latest salvo against the almighty greenback, will enable China, the top rival to US economic hegemony, and Brazil, the biggest economy in Latin America, to conduct their massive trade and financial transactions directly, exchanging yuan for reais and vice versa instead of going through the US dollar.
“The expectation is that this will reduce costs... promote even greater bilateral trade and facilitate investment,” the Brazilian Trade and Investment Promotion Agency (ApexBrasil) said in a statement.
China is Brazil’s biggest trading partner, with a record US$150.5 billion (S$200 billion) in bilateral trade last year.
The deal, which follows a preliminary agreement in January, was announced after a high-level China-Brazil business forum in Beijing.
Pakistan, China agree to trade in yuanPakistan on Monday announced an agreement with China to use Chinese currency for bilateral trade to end the burden of relying on U.S. dollars.
'China and Pakistan agreed to start trading in the yuan instead of the dollar,' Fawad Chaudhry, minister of information, told reporters in Islamabad.
This agreement, reached during the Pakistani premier’s current visit to China, would help Pakistan get rid of the dollar burden in $15 billion of bilateral trade, he added.
Imran Khan’s four-day official visit to China is ending Monday.
The move to Chinese currency would also help both countries replace the U.S. dollar for their transactions and investment in the multi-billion dollar China-Pakistan Economic Corridor (CPEC).
This June, the State Bank of Pakistan formally allowed both public and private enterprises to use Chinese currency for bilateral trade and investment activities.
China and Russia ditch dollar in move toward 'financial allianceRussia and China are partnering to reduce their dependence on the dollar -- a development some experts say could lead to a "financial alliance" between them.
In the first quarter of 2020, the dollar's share of trade between Russia and China fell below 50% for the first time on record, according to recent data from Russia's Central Bank and Federal Customs Service.
The greenback was used for only 46% of settlements between the two countries. At the same time, the euro made up an all-time high of 30%, while their national currencies accounted for 24%, also a new high.
Russia and China have drastically cut their use of the dollar in bilateral trade over the past several years. As late as 2015, approximately 90% of bilateral transactions were conducted in dollars. Following the outbreak of the U.S.-China trade war and a concerted push by both Moscow and Beijing to move away from the dollar, however, the figure had dropped to 51% by 2019.
Alexey Maslov, director of the Institute of Far Eastern Studies at the Russian Academy of Sciences, told the Nikkei Asian Review that the Russia-China "dedollarization" was approaching a "breakthrough moment" that could elevate their relationship to a de facto alliance.
