China, Brazil no longer use U.S. dollar as intermediary

(ECNS) -- China and Brazil have reached an agreement to not use the U.S. dollar as an intermediary any longer, but trade in their own currencies directly, the Brazilian government said on Wednesday.

According to this deal, China and Brazil can conduct large-scale trade and financial transactions directly, exchanging yuan for reais and vice versa instead of going through the U.S. dollar.

"The expectation is that this will reduce costs... promote even greater bilateral trade and facilitate investment," AFP quoted the Brazilian Trade and Investment Promotion Agency as saying.

China has been Brazil's largest trading partner for 14 consecutive years, with a record $171.49 billion in bilateral trade last year, said the Chinese Ministry of Commerce.

China has inked similar agreements with Russia, Pakistan and other countries.