The National Bank for Economic and Social Development (BNDES) and the China Development Bank (CDB) signed this Wednesday a loan operation worth R$4 billion (around 5 billion yuan), in the Brazilian bank’s first operation in foreign currency.
The fundraising contract was signed during Chinese President Xi Jinping’s visit to Brasília, in a block of 37 agreements in different areas, and is expected to last three years. According to BNDES, the resources will be used in a line of credit aimed at supporting BNDES investments in different sectors.
“The BNDES has intensified its international operations, seeking closer ties with various development institutions to diversify funding and expand investments in Brazil,” said the president of BNDES, Aloizio Mercadante.
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“The loan in Chinese currency is an important step to diversify the options of Brazilian businesspeople, especially exporters, because they have the natural exchange rate protection resulting from their exports.”
The move by the two banks is a first step in the project of expanding business in local currency, one of the objectives most intensely discussed in BRICS, the bloc of emerging economies shared by China, Brazil and now eight other countries.
President Luiz Inácio Lula da Silva has been one of the biggest advocates that the BRICS countries need to create an alternative to the dollar in transactions between them, to depend less on reserves of the North American currency.
At the last summit, Lula defended that the creation of “alternative means of payment for transactions between countries” is the most urgent alternative for the bloc, whose presidency now belongs to Brazil.
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