Memorandum of Understanding between the Ministries of Finance and bilateral agreement of currency swap were announced on Tuesday in Durban

During the meeting of Ministers of Finances and presidents of Central Bank of BRICS in Durban, South Africa, on Tuesday (26), the Minister of Finance of China, Lou Jiwei, and the Minister of Finance of Brazil, Guido Mantega, signed a Memorandum of Understanding between the institutions on Bilateral Cooperation on Macroeconomic, Tax and Financial Policies.

The MoU aims to strengthen macroeconomic, fiscal, financial, monetary and supervisory cooperation in both bilateral and multilateral scope between Brazil and China. It also intends to expand common economic interests, boosting economic and social development of both countries, and promoting a strong, sustainable and balanced growth of global economy.

“It is a sort of umbrella which implies a closer relationship with China in several areas," said Mantega. The minister also appointed the importance of having greater cooperation between the two countries in the investments area of infrastructure.  

Also as part of bilateral cooperation, the Central Bank of Brazil and the People's Bank of China announced the establishment of a bilateral agreement of swap currency the amount of R$ 60 billion or CNY 190 billion, valid for three years with possibility of extension by agreement between the two parties. This line aims to facilitate bilateral trade between the two countries.

“It's a mechanism to be applied in case of worsening of global financial landscape", said the minister of finance. The Central Bank president, Alexandre Tombini, appointed that the agreed amount is ten months of exports from Brazil to China and eight months of imports. Tombini also said that this agreement does not affect international reserves.

Source: Ministry of Finance

29 March 2013