China and Brazil to Ditch U.S. Dollar? Hardly [View article]
The arrangement China and Brazil are seeking is to use Yuan for trade based on Yuans supplied by China for currency swaps - so the invoicing occurs in Yuans (not Reals). This is plausible arrangement - Chinese currency is strong and stable - huge currency reserves and trade surplus to back it. Every small trade does not have to be done in Yuans - the major trades (likely accounting for 95% of the trades) can be done in Yuans - deficits can be suitably settled every few years.
This is beneficial arrangement for the two - I can see them implementing it.
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The arrangement China and Brazil are seeking is to use Yuan for trade based on Yuans supplied by China for currency swaps - so the invoicing occurs in Yuans (not Reals). This is plausible arrangement - Chinese currency is strong and stable - huge currency reserves and trade surplus to back it. Every small trade does not have to be done in Yuans - the major trades (likely accounting for 95% of the trades) can be done in Yuans - deficits can be suitably settled every few years.
May 20 08:22 PM
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All Comments by Fighting Yoda »China and Brazil to Ditch U.S. Dollar? Hardly [View article]
This is beneficial arrangement for the two - I can see them implementing it.