Brazil, China Look to End Use of Dollars for Trade

Wednesday, May 20, 2009 9:36 AM

By: Gene J. Koprowski

Brazil and China are talking about dumping the dollar for international commerce, instead relying on their own currencies to conduct trade.

A report in The Financial Times cites sources in the central bank of Brazil and aides to Luiz Inácio Lula da Silva, Brazil’s president.

Lula is visiting Beijing this week. Reportedly, Hu Jintao, China’s president, and Lula first discussed the idea of replacing the dollar with the yuan (known also as renminbi) and the real as trade currencies when they met at the G20 summit in London recently.

The talks are at an early stage. The leaders are not discussing a currency swap of the kind China recently agreed with Argentina and which the U.S. had agreed with several countries, including Brazil.

“Currency swaps are not necessarily trade related,â€