FT: Brazil and China eye plan to axe dollar

China takes another step to reduce its dependence on the US dollar, and wants to trade in local currencies with Brazil.

FT Reports:

Brazil and China will work towards using their own currencies in trade transactions rather than the US dollar, according to Brazil’s central bank and aides to Luiz Inácio Lula da Silva, Brazil’s president.

The move follows recent Chinese challenges to the status of the dollar as the world’s leading international currency…..“Currency swaps are not necessarily trade related,” the official said. “The funds can be drawn down for any use. What we are talking about now is Brazil paying for Chinese goods with reals and China paying for Brazilian goods with renminbi.”

Japan had made a similar move a few weeks ago.

2 thoughts on “FT: Brazil and China eye plan to axe dollar”

  1. In this interconnected global world, changing the world currency, on fiat of few is not realistic. Particularly so when it is driven by autocratic or imperialist countries. The most recent activism is driven by China’s fear of losing its reserve. on one side it earns it by keeping its currency in check, and then expects that cycle to continue forever. History shows for any country to dominate on world scene, it needs prosperity within its own people first (right from Romans…. to british, to US). China is certainly not at that point yet.

  2. What are your thoughts on this? I personally feel that removing the dollar as a world currency would be an interesting move (even though it might results in the US falling totally apart).

    BTW could I ask you to add some kind of “subscribe to comments” feature on your blog? It would be great to get an email once you reply to comments. Thanks.

Leave a Reply

Your email address will not be published. Required fields are marked *