Two weeks ago, China set up an intermediary bank to handle these operations.
In a speech this Thursday (13.Apr.2023) in Shanghai, the president Luiz Inacio Lula da Silva (PT) defended the realization of trade in the currencies of the member countries of the Brics.
The Brazilian Chief Executive spoke on the morning of this Thursday (13.Apr.2023) at the ceremony that celebrates the inauguration of the former president Dilma Rousseff (EN) no NBD (New Development Bank), the bank of the BRICS.
Lula said that he asks himself every night: “Why are all countries obliged to do their trade backed by the dollar? […] Why not the yen? Why not the real one?”, and was applauded by those present.
He said that the currency change “is difficult, because there are people who are not used to it”, but he emphasized the need for the measure. He asked Dilma to have the patience of the Chinese.
On March 29, during a visit by a delegation of Brazilian businessmen to China, the Asian country authorized the subsidiary ICBC (Industrial and Commercial Bank of China, or Banco Industrial e Comercial da China, in Portuguese) to make the direct compensation from yuan to real.
The establishment of an intermediary bank to make clearing, acting as “clearing house”, is necessary so that it is possible to carry out commercial and financial operations directly between two currencies. In this way, it will not be necessary to use the US dollar in operations.
The central banks of both countries had signed, on January 31, a memorandum to make the conversion possible. During the business event in Beijing, the secretary of International Affairs at the Ministry of Finance, Tatiana Rosito, stated that the Chinese government had determined that an institution responsible for the operation be established.
“This ‘clearing house’ is an initial step” for the implementation of the measure, explained the secretary. According to Rosito, despite the authorization, there is a lack of immediate resources from these institutions and lack of knowledge on the part of businessmen about these operations.
ICBC is the world’s largest bank by total assets, according to S&P Global. It is controlled by the Chinese government and was founded in 1984. Its Brazilian subsidiary was opened in 2013.
China’s government has pursued the internationalization of its currency since 2009 as a response to the global financial crisis. In 2013, the yuan became the 2nd most used currency in the world, after the US dollar.
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