Bank of Brazil in London would be in charge of currency conversion.

 

There is a possibility that Argentina will start using yuan, the Chinese currency, to pay for its imports from Brazil. The proposal was presented by Brazil’s Finance Minister, Fernando Haddad. According to AgenciaBrasil, a response from the Argentine authorities is currently awaited. 

 

The official provided additional details on how this system would work. In the proposed scenario, Argentina would make payments for Brazilian products in yuan. Subsequently, the Bank of Brazil’s London branch would be in charge of converting the Chinese currency into reais, and finally transferring the payments to Brazilian exporters. In an initial testing stage, these conversions would be limited to a range of between US$100 million and US$140 million.

 

Haddad stressed that this approach would help to increase security for Brazilian exporters, who have expressed concerns about possible payment defaults by Argentine companies. Both the Brazilian Treasury and the Bank of Brazil have expressed their agreement with the proposed mechanism.

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