SÃO PAULO, Brazil — Brazil and China have agreed to a currency swap deal in an attempt to safeguard against global financial crisis and strengthen trade ties.
The agreement will allow the two BRICS nations' central banks to exchange local currencies worth up to $60 billion reais or $190 billion yuan ($30 billion), according to BBC News. The money can be used to shore up reserves in times of crisis or put toward upping bilateral trade.
"As international credit remains scarce, we will have enough credit for our transactions," Brazil's Finance Minister Guido Mantega said to BBC.
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The deal is part of a larger bilateral trade agreement between the two emerging-market countries that was announced at the Rio+20 conference after Brazilian President Dilma Rousseff met with Chinese Prime Minister Wen Jiabao, reported The Wall Street Journal. The 10-year agreement will also attempt to expand reciprocal investments between the countries and boost the exportation of Brazilian manufactured goods to China.
Brazil's policy makers said they were trying to tap the growing local market in China, its biggest export market, according to The New York Times. Mantega said Chinese companies were also interested in investing in Brazil's expansive oil and natural gas sectors.
The Journal also reported that Mantega said Brazil and China are tightening "a privileged relationship."