March 30, 2023

China and Brazil have reached a deal to trade in their own currencies, ditching the U.S. dollar as an intermediary, the Brazilian government said Wednesday.

The deal will enable China, the world's second-largest economy, 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 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.

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