Agreement signed with the China Development Bank is valued at R$4 billion; credit will support investments in Brazil
The (National Bank for Economic and Social Development) signed this Wednesday (Nov 20, 2024) its 1st loan in Chinese currency, the RMB (renmimbi). The agreement signed with the CDB (China Development Bank) is for RMB 5 billion, the equivalent of R$4 billion.
The credit line lasts for 3 years and will be used to support investments by the state development bank in various sectors of the Brazilian economy.
According to the president of BNDES, the partnership also plays a role in expanding cooperation in local currency between countries. Another objective of the agreement is to enable the promotion of bilateral trade between China and Brazil.
“BNDES has intensified its international operations, seeking closer ties with various development institutions to diversify funding and expand investments in Brazil. The Bank’s partnership with China is historic, since 1997, resulting in cooperation on projects of interest to China and Brazil. The loan in Chinese currency is an important step to diversify the options of Brazilian businesspeople, especially exporters, because they have the natural exchange rate protection resulting from their exports”said Mercadante.
The agreement is also a nod to de-dollarization – moving away from the dollar in financial agreements. This was one of the main topics discussed at the BRICS summit in Kazan, Russia, in October this year. The BRICS countries agreed to advance the use of their national currencies instead of the dollar for cross-border payments.
