China and Brazil completed a commercial deal in their local currencies for the first time, with transactions financed and settled in renminbi (RMB) and converted directly into Brazilian reals, according to the Bank of China Brazil SA.
The transaction was a 43-crate pulp export from Eldorado Brasil, one of the leading companies in the Brazilian pulp industry, shipped in August from the Brazilian port of Santos to the port of Qingdao, China.
The financial transactions were carried out throughout the following month and completed in Brazilian currency on Sept. 28.
Brazil and China central banks agree to boost yuan-real transactions
The company agreed to have a Chinese import company adopt the yuan as the nominal contract currency in August and appointed the Central Bank of Brazil as the receiving bank to test the settlement.
The bank received a deferred payment letter of credit in RMB issued by the importer and subsequently, the Brazilian company was informed after the audit of the cargo documents and letters of credit was completed.
The transaction followed the signing of a memorandum of understanding on cooperation between the two governments to promote local currency trade in April.
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