The Brazilian government has announced that it has reached an agreement with China to abandon the dollar and use their local currencies in their bilateral trade dealings.
According to AFP, the agreement will allow China, the biggest rival to US economic dominance, and Brazil, the largest economy in Latin America, to conduct their massive trade deals directly and exchange the Chinese yuan for the Brazilian real instead of relying on the dollar.
"There are expectations that this will reduce costs, further promote bilateral trade and facilitate investment," the Brazilian Agency for the Promotion of Trade and Investment (ApexBrazil) said in a statement.
China is Brazil's largest trading partner, and the trade exchange between them amounted to about $150 billion last year.
The agreement was announced during a high-level China-Brazilian business forum in Beijing and follows a preliminary agreement in January.
Brazilian President Luiz Inacio Lula da Silva was due to attend the forum but had to postpone his visit to China after contracting pneumonia.
Officials said the Industrial and Commercial Bank of China and BBM Bank would carry out the transactions.
China also abandoned dealings in dollars with Russia, Pakistan, and several other countries.