President of Brazil Luiz Inacio Lula da Silva called for an end to dollar trade dominance, Bloomberg reported.
The premier urged BRICS nations to come up with an alternative to replace the dollar in foreign trade. He supported China’s crusade against US global dominance, just as he prepared to meet with President Xi Jinping in Beijing.
Brazil President Lula urges BRICS nations to come up with alternatives to end dollar trade dominance
Lula’s remarks were made on Thursday during a visit to the Shanghai-based New Development Bank, an institution created by BRICS countries. The BRICS includes Brazil, Russia, India, China, and South Africa.
The former Brazilian President Dilma Rousseff is now the new chief executive of the bank. Rousseff is also accompanying Lula on his trip to China, according to AP News.
“Why can’t an institution like the BRICS bank have a currency to finance trade relations between Brazil and China and all the other BRICS countries?” Silva said.
“Who decided that the dollar was the (trade) currency after the end of gold parity?”
Efforts by Beijing to increase the adoption of its currency in international trade have intensified, according to Bloomberg. In the previous month, China and Brazil implemented measures to simplify the settlement of their foreign trade transactions in renminbi or real. Their objective was to reduce expenses by excluding a third currency from the process.
Brazil and China to sign multiple agreements to boost ties as Lula visits Shanghai
The Brazilian government has announced that Lula’s visit to China will see the signing of at least 20 bilateral agreements. It will signal an improvement in relations between the two countries after a period of strain under the previous leader Jair Bolsonaro.
According to Brazil’s Finance Minister Fernando Haddad, who is also traveling with Lula to China, bilateral trade already uses local currencies through credit receipts. The aim is to broaden the mechanisms that enable trade transactions to be resolved without the involvement of a third currency.
“The advantage is to avoid the straitjacket imposed by necessarily having trade operations settled in a currency of a country not involved in the transaction,” he told reporters in Shanghai.
