While many investors discuss whether or not the economy of the People’s Republic is having a ‘hard’ or ‘soft’ landing, there is no debate the Chinese renminbi ( CYB , quote) is gaining greater acceptance as a currency of exchange. Those looking to buy and sell in emerging market nations should take note.
In a recent agreement, Brazil and China will allow for $30 billion in currency swaps utilizing the real and the renminbi . Brazilian Finance Minister Guido Mantega says “it will allow the countries to boost financial reserves, which is useful at a time of financial stress… with that swap, our trade flows can continue.”
This will boost trade between Brazil and China. At present, China accounts for about 20% of Brazil’s export earnings, chiefly commodities such as iron ore, oil, and soy beans.