Lula’s historic dollar call
Support for the Chinese government, which is trying to reduce the global dominance of the dollar, came from Brazilian President Lula da Silva. Calling out developing countries, Lula said that national currencies should be used instead of the US dollar in international trade.
Lula, who took office in January and made his first official visit to China, urged the BRICS trading countries (Brazil and China, Russia, India, South Africa) to find an alternative currency.
FORMER PRESIDENT DILMA TAKES HEAD OF BRICS BANK
Former Brazilian President Dilma Rousseff took office this week as president of the New Development Bank (NDB), an international development bank founded by the BRICS countries. NDB’s partners include Egypt, Bangladesh, Uruguay and the United Arab Emirates.
President Lula of Brazil, for his part, traveled to Shanghai, China, to witness this ceremony. Lula delivered an impassioned speech at the ceremony, explaining that the BRICS countries should trade their own currencies.
“I wonder every night why all countries have to base their trade on the dollar. Who decided that our currencies are weak and worthless in other countries?” Lula said in his speech. she asked the question.
Lula also said: “Why can’t the BRICS have a currency to finance trade relations between countries? Because we are not used to this idea. The whole world is tied to a single currency,” she said.
‘DOLLAR IMPLEMENT STRIPJET’
Brazilian Finance Minister Fernando Haddad, who traveled to China with Lula, also told reporters that Brazil will try to create new trade mechanisms with developing countries to disable the use of the dollar.
“So that we can avoid the straitjacket imposed by trading in the currency of a country that is not involved,” Haddad said.
‘INCREASING THE SHARE OF THE YUAN IS LOGICAL’
Last year, the trade share of China’s currency, the yuan, doubled to 4.5 percent, according to data from the SWIFT global payment system. In this surge, sanctions that began after the Russia-Ukraine war supported trade between Russia and China.
According to the report cited by the Financial Times, Goldman Sachs economist Maggie Wei commented: “There are structural reasons to expect China’s share of world trade to increase.”
Wei said: “China’s market share in world trade in goods is around 15 percent. The yuan’s share is 4.5 percent. This share is very small compared to China’s share in the world trade “So it makes sense that the yuan’s share of trade finance will continue to rise,” he said.