China and Brazil have officially reached an agreement: foreign trade can be settled in local currency, which is beneficial for China to import Brazilian pulp!

On March 29th, China and Brazil officially reached an agreement that local currency can be used for settlement in foreign trade. According to the agreement, when the two countries conduct trade, they can use local currency for settlement, that is, the Chinese yuan and the real can be directly exchanged, and the US dollar is no longer necessarily used as the intermediate currency. In addition, this agreement is not mandatory and can still be settled using the US during the trading process.

     If the trade between China and Pakistan does not need to be settled by the United States, avoid being “harvested” by the United States; The import and export business has long been affected by exchange rates, and this agreement reduces dependence on the United States, which can to some extent avoid external financial risks, especially exchange rate risks. Settlement in local currency between China and Pakistan will inevitably reduce the costs of pulp companies, thereby promoting the convenience of bilateral pulp trading.

This agreement has a certain Spillover effect. Brazil is the largest economy in Latin America, and for other Latin American countries, this not only enhances the influence of the renminbi in the region, but also facilitates pulp trade between China and Latin America.