China Pakistan Trade Achieves Local Currency Transactions for the First Time

China News Agency, S ã o Paulo, October 2 (Reporter Lin Chunyin) On October 2 local time, the reporter learned from Bank of China (Brazil) Co., Ltd. (hereinafter referred to as "Bank of China Brazil") that China Brazil Trade has achieved a full process closed-loop transaction of local currency transactions for the first time.
On September 28th, Bank of China Brazil successfully processed the RMB letter of credit discount business for Brazilian enterprises, and immediately converted it into Brazilian real for recording. For the first time in the history of China Brazil trade, it achieved the full process closed-loop operation of RMB valuation, RMB settlement, RMB financing, and RMB direct exchange into real.
The first water test was conducted by Eldorado Brasil in Brazil. The company was established in 2010 and is one of the most competitive enterprises in the Brazilian pulp industry, with approximately 40% of its products sold to China. In August of this year, the company accepted a Chinese import enterprise in Xiamen to use RMB as the contract valuation currency, designated Bank of China Brazil as the receiving bank, and attempted to settle in RMB.
On August 26th, 43 boxes of pulp from Brazil's El Dorado Pulp Company were loaded onto a ship from Santos Port in Brazil and departed for Qingdao Port in China. In September, Bank of China Brazil received a RMB deferred payment letter of credit from the importer, and subsequently notified El Dorado Pulp Company of Brazil to complete the review of the shipping documents and letter of credit. On September 28th, it processed the RMB letter of credit discount business for the company and helped the exporter receive the RMB payment in advance. According to Brazilian foreign exchange management regulations, Bank of China Brazil immediately converts the received RMB into real and transfers it to the customer's local account, achieving a full process of closed loop operations from RMB valuation for goods transactions to RMB settlement, financing, and local currency direct exchange for fund transactions.
In April of this year, during the visit of Brazilian President Lula to China, the two countries signed a memorandum of understanding on cooperation to promote local currency trade.
Industry observers believe that this local currency transaction, as the first exploration of China Brazil trade to truly achieve local currency pricing and settlement, provides a one-stop solution for Brazilian exporters to settle in RMB. It is a milestone in the history of China Brazil trade and will also provide examples and paths for more enterprises to adopt the same method to achieve local currency settlement.
It is known that Bank of China Brazil is currently utilizing the global layout advantage of Bank of China Group to help Brazilian companies open RMB settlement accounts offshore, accept payments from Chinese importers in RMB, and use RMB to import production materials such as machinery and equipment from China. In the future, Bank of China Brazil will continue to strengthen market cultivation, increase Brazilian companies' awareness and acceptance of the RMB, innovate and optimize business processes, enrich relevant products of the RMB business, and attract more China Brazil trading partners to try local currency settlement. (End)