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Brazil is accumulating no less than 124 billion yuan in reserves around the world, which is equivalent to approximately R$84 billion. This movement is part of a strategy to diversify the country's international assets, increasing the presence of the Chinese currency in the Central Bank's portfolio. The investment in the yuan reflects the strengthening of relations between Brazil and China, in addition to seeking to reduce dependence on the dollar.
Brazil, which has international reserves valued at US$330 billion, is betting heavily on the yuan, or renminbi, China's official currency. Since it was included by the IMF in the Special Drawing Rights (SDR) basket in 2016, the Chinese currency has been gaining increasing global relevance. For Brazil, this choice is not only technical, but also political and strategic.
With 124 billion yuan in reserves, the country reaffirms its position as one of the main China's trading partners and diversifies exchange rate risks, reducing vulnerability to the dollar. This strategy reflects the increasingly strong trade ties between Brazil and China, especially considering that in 2023, China accounted for more than 30% of Brazilian exports.
Diversification and bilateral trade between Brazil and China
The use of the yuan in Brazil's portfolio is a direct reflection of the growing bilateral trade between Brazil and China. Products such as soybeans, iron ore and oil top the list of Brazilian exports to the Asian giant, consolidating China as Brazil's largest trading partner.
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Recent bilateral agreements have boosted direct yuan transactions, eliminating intermediaries and dollar conversion costs. This dynamic increases the yuan’s relevance as a reserve currency and solidifies its position as a reliable alternative in global trade.
Risks and benefits of diversification with 124 billion yuan
Experts point out that while diversification with 124 billion yuan in reserves brings benefits such as greater flexibility and security, it also requires caution. The yuan, despite its growing relevance, still faces challenges related to its regulation and economic particularities.
Even so, the Brazilian Central Bank's move demonstrates a strategic vision aligned with the transformations in the global economic scenario, where China plays a leading role.
Future prospects for international reserves
The trend of reserve diversification is expected to continue in the coming years, in line with the strengthening of trade relations between Brazil and China. With 124 billion yuan in reserves, Brazil is not only strengthening its ties with the main driver of the global economy, but is also positioning itself as one of the countries that invests the most in currency diversification.
this scenario puts Brazil in a prominent position, both in international trade and in the search for economic stability in times of uncertainty.
That's why the **** of. Our real is already 6x weaker than the Dollar, it's burning the Dollar reserves
To buy yuan.
That's not what I'm aware of. The depreciation of the Real is the result of financial sabotage caused by the current management of the Central Bank, led by a sellout. It is the result of criminal speculation in the financial market, currently the greatest enemy of the well-being of our people. The Central Bank is doing nothing to prevent the meltdown of the Brazilian currency. The inflammation in Brazil is the result of manipulation, an act of bad faith.
It seems like you have no brains! The current president of the Central Bank does exactly the opposite of what you say. Instead of holding swap auctions to control speculation with the dollar, he preferred to help the speculators of Faria Lima!!