BRASILIA (Reuters) -Brazil’s central bank said Monday it will sign a currency swap agreement with the People’s Bank of China, with a maximum outstanding value of 157 billion reais ($27.69 billion) and a five-year term.
The agreement, to be signed on Tuesday in Beijing during Brazilian central bank governor Gabriel Galipolo’s visit to China, aims to provide liquidity to support financial markets in times of stress, the bank said.
The announcement marks another step in strengthening ties between Latin America’s largest economy and China, amid heightened global volatility triggered by sweeping trade tariffs imposed U.S. President Donald Trump.
It follows Monday’s announcement of more than $4.5 billion in planned Chinese investments in Brazilian sectors ranging from auto manufacturing and renewable energy to pharmaceuticals and semiconductors, as leftist President Luiz Inacio Lula da Silva visits the country.
Washington and Beijing reached a deal to temporarily ease tariffs, but even before tensions escalated between the two, Lula had long emphasized China’s global importance, saying on Monday that “if it’s up to my government, our relationship with China will be indestructible.”
Brazil’s central bank noted it already has a similar currency swap arrangement with the U.S. Federal Reserve, made permanent in 2021, which allows the Brazilian monetary authority to access U.S. dollars through repurchase operations backed by U.S. Treasury securities.
The bank added it is also in talks with other counterparts to establish similar agreements, which it said have become common since the 2008 global financial crisis.
China is Brazil’s largest trading partner, while the U.S. remains Brazil’s biggest source of foreign investment.
($1 = 5.6699 reais)
(Reporting by Marcela Ayres; Additional reporting by Andre Romani; Editing by Brendan O’Boyle)
