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No more greenbacks for China, Brazil and BRIC?

No more greenbacks for China, Brazil and BRIC?

Rio de Janerio: A Chinese plan to end the hegemony of the US dollar in international trading is gaining support all the other BRIC countries (Russia, Brazil and India) and especially Brazil.

This week at the G-8 Summit, China, Russia and Brazil have been pushing their agenda to develop a new international standard reserve currency to replace the US dollar.
And back in Brazil, Eduardo Lopes, the president of Sindamar, the Santos and Sao Paulo Shipagents Association, has lent his support today to Brazilian President Lula's bid for a new international currency.

The BRIC governments recently met in Yekaterinburg, Russia to discuss how best for emerging economies, like theirs, to reform international financial institutions to prevent future collapses in the world economy. And high on the agenda was getting rid of the greenback as the basis for international trade contracts.

Lopes, who is also a senior manager for Fertimport (a Santos based shipping agency) said that shippers in the state of Sao Paulo - including chicken, beef and autoparts exporters - were suffering terribly from the "wildly fluctuating exchange rates" between the Brazilian currency, the Real, and the greenback.

Lopes added that in recent years there had been doubts as to whether using the dollar for international trade was beneficial to Brazil or not, especially when trading with China. And the consensus now in Brazil is that it is not.

He told SAO: "Yes, I think it would be a good idea. Brazil will be one of the countries involved in this new currency and i think our interests will be covered by it."
In Brazil exporters and importers have been suffering wild fluctuations of the US dollar, which last June was Reais1.55 to the greenback, and then that jumped to Reais2.5:$1 before returning to around 2:1.

Lopes added: "It makes it very difficult for shippers to plan ahead when they don't know which way the dollar exchange rate will move."  [08/07/09]