China Takes a Step Forward: Yuan Clearing Arrangements Set Up in Brazil

On Tuesday, China’s central bank announced that it has entered into an agreement to establish yuan clearing arrangements in Brazil. The purpose of this move is to increase the currency’s international influence.

The People’s Bank of China stated that having such arrangements in place for the renminbi (RMB), also known as the yuan, would enhance cross-border transactions and further enhance bilateral trade and investment.

Recently, China has signed similar agreements to establish yuan clearing with Pakistan, Kazakhstan, and Laos.

According to data from Chinese customs, the two-way trade between China and Brazil reached $172 billion in 2022.

Since 2009, China has been striving to increase the use of the yuan globally, with the aim of reducing its dependence on the U.S. dollar for trade and investment settlements and challenging the dollar’s status as the world’s major reserve currency.