On October 2, local time, the reporter learned from Bank of China (Brazil) Co., Ltd. (hereinafter referred to as "BOC Brazil") that China-Brazil trade has realized the full-process closed-loop transaction of local currency transactions for the first time.On September 28, Bank of China Brazil successfully handled the discount business of RMB letters of credit for Brazilian enterprises, and instantly converted them into Brazilian reals. For the first time in the history of China-Brazil trade, it realized the full-process closed-loop operation of RMB pricing, RMB settlement, RMB financing and direct RMB conversion into reals.
The first to test the waters was Eldorado Brasil, a Brazilian pulp company. The company was established in 2010 and is one of the most competitive companies in the Brazilian pulp industry. About 40% of its products are sold to China. In August this year, the company accepted RMB as the contract pricing currency for an import company in Xiamen, China, and designated BOC Brazil as the beneficiary bank to test RMB settlement.
On August 26, 43 boxes of pulp from Eldorado Pulp Company of Brazil were shipped from the Port of Santos, Brazil, and departed for the Port of Qingdao, China. In September, BOC Brazil received the RMB deferred payment letter of credit issued by the importer, and then notified the Brazilian Eldorado Pulp Company, completed the review of the shipping documents and the letter of credit, and handled the RMB letter of credit discount business for the company on September 28 to help the exporter receive the RMB payment in advance. According to Brazilian foreign exchange management regulations, BOC Brazil will immediately convert the received RMB into reals for entry into Brazil and remit it to the customer's local account, realizing a full-process closed-loop operation from RMB pricing of goods transactions to RMB settlement, financing and direct exchange of local currency for capital transactions.
In April this year, during Brazilian President Lula's visit to China, the two countries signed a memorandum of understanding on cooperation to promote trade in local currencies.
Industry observers believe that this local currency transaction is the first exploration of China-Brazil trade to truly achieve local currency pricing and settlement, and provides Brazilian exporters with a one-stop solution for RMB settlement. It is a milestone event in the history of China-Brazil trade and will surely provide an example and path for more companies to use the same method to achieve local currency settlement.
It is known that BOC Brazil is currently using BOC Group’s global layout advantages to help Brazilian companies open RMB settlement accounts offshore, accept payments in RMB from Chinese importers, and use RMB to import machinery and equipment and other production materials from China. In the future, BOC Brazil will continue to strengthen market cultivation, increase Brazilian enterprises' awareness and acceptance of RMB, innovate and optimize business processes, enrich relevant products for RMB business, and bring together more China-Brazil trading partners to try local currency settlement.