Studies to Eliminate Dollar in Brazil-China Trade Going Slow

China and Brazil have created a work group to study the possibility of implementation of a bilateral trade program in their respective currencies, in replacement of the North American dollar, said a source in the Central Bank of Brazil.

"The negotiations are still in an initial phase, with a work group having been created with representatives of Brazil and China, who also met during the G-20 summit, in London," explained a source.

The next step should be the visit of a Central Bank of Brazil delegation to China, "despite there being no forecast as to when it may come true," said the source.

The work group should analyze the "results to be reached through an agreement that China recently established with Argentina" - the first country in South America to benefit from trade exchanges in the same currency with the Asian giant and with whom Brazil has also been developing the same program since September 2008.

The Central Banks of China and Brazil are also going to develop a "study of the potential bilateral trade volume to analyze the possibility of an agreement."

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Written by Newsroom
Wednesday, 16 September 2009
[Source] - brazzilmag.com

Weekend Newswire: South-South Cooperation

[Brazil - Argentina] -- Brazil, Argentina Working on $1.5 Billion Credit Line
Brazil and Argentina are nearing agreement on a “precautionary” measure to create a $1.5 billion credit line to help boost liquidity amid the global financial slowdown, ministers from the two countries said.

As many as seven countries, including Argentina and Uruguay, may establish reciprocal credit lines to help boost liquidity in South America, Brazilian Finance Minister Guido Mantega told reporters in Buenos Aires. Argentine Economy Minister Carlos Fernandez said the credit line with Brazil would be for the equivalent of $1.5 billion in local currencies.


[Peru - South Korea] -- Peru, S Korea to hold 2nd round of FTA talks
The Second Round of Negotiations for a Free Trade Agreement (FTA) between Peru and the Republic of Korea will be held in the Peruvian capital Lima on May 11-14, the Ministry of Foreign Trade and Tourism (Mincetur) reported Sunday.

On Monday, the negotiating teams will discuss issues such as dispute settlement, trade remedies, temporary entry, investment, sanitary and phytosanitary measures, cooperation, rules of origin and public purchases.

On Tuesday, they will discuss trade in goods, intellectual property, telecommunications and financial services.

On Wednesday, the meeting will focus on institutional and labor matters, financial services and competition policy.

On Thursday, issues to be discussed include customs and trade facilitation, services and investments, as well as environment.


[China - Zambia] -- Zambia picks China group to run Luanshya copper mine
Zambia on Friday selected Chinese company NFC Africa as the new investor to run the closed Luanshya Copper Mines (LCM), which is due to restart production at the end of May.

"It is now with great pleasure that I announce the sale of the 85% shares to China Nonferrous Metals Mining, commonly known as NFCA," Zambia's President Rupiah Banda told former Luanshya Copper Mines workers at a public meeting.

China's currency swaps help expand yuan's reach -- Caijing

Li Tao and Zhang Man of Caijing, a financial news publication of China report on the rising influence of China's currency the Renminbi (yuan). The two write:

The cross-border exchange of regional currencies has become an important way to defend against the global economic downturn and promote trade. To circumvent a shortage of dollars and other currencies, as well as reduce exposure to exchange rate volatility, developing countries in eastern and central Asia as well as South America have implicitly recognized the Chinese yuan as a currency for settlements and, in some cases, reserves.

China is willing and eager to help ease liquidity in the financial system... as long as it gets some justified financial clout out of it.

So far China has established the following currency swaps:


Dec 12 - China and South Korea sign a 180 billion yuan currency swap framework agreement.

Jan 20 - China and Japan sign a 200 billion yuan currency swap between the People's Bank of China -- and the Honk Kong Monetary Authority.

Feb 8 - China signs a currency swap agreements with Malaysia's central bank for 80 billion yuan

March 11 - China signs a 20 billion yuan deal with the National Bank of Belarus

March 24 - China signs a 100 billion yuan swap deal with the Central Bank of Indonesia

Click here to read more on this topic from Caijing

China and Argentina Agree on Currency Swap --Update from IDB annual meeting in Colombia

March 30 (Bloomberg) -- The central banks of China and Argentina reached an agreement for a three-year, 70 billion yuan ($10 billion) currency swap, Chinese Central Bank Governor Zhou Xiaochuan told reporters in Medellin, Colombia, today.

It’s the first such accord between the world’s third- biggest economy and a Latin American nation. The move follows swap accords between China and Indonesia, South Korea, Hong Kong, Malaysia and Belarus.

The agreement broadens Argentina’s access to foreign- currency reserves and may ease concerns about the country’s ability to control the peso amid uncertainty over a conflict with farmers over export taxes and legislative elections scheduled for June 28. Argentina wasn’t part of a swap facility program created by the U.S. Federal Reserve for emerging markets, including Brazil and Mexico, last year.

Click here to access this full article from Bloomberg