China-Brazil deepen financial ties, boost local currency use
The People’s Bank of China and the Central Bank of Brazil held their fourth Financial Strategic Cooperation Working Group meeting on June 9, 2026. Governors Pan Gongsheng and Gabriel Galópolo co-chaired the discussions on local currency usage and cross-border payments.
Local currency use gains traction
The fourth meeting of the China-Brazil Financial Strategic Cooperation Working Group, co-chaired by People’s Bank of China Governor Pan Gongsheng and Central Bank of Brazil Governor Gabriel Galópolo, recognized significant advancements in bilateral financial cooperation over the past year.
Pragmatic outcomes were achieved in areas such as local currency usage, bilateral investment and financing, and cross-border payments.
Both central banks detailed concrete steps to facilitate local currency accounts for enterprises in both markets, aiming to streamline transactions and reduce foreign exchange conversion costs.
Discussions also focused on expanding the utilization of local currency swap lines, which provide essential liquidity and stability for direct currency exchanges.
A significant topic was the establishment of direct trading mechanisms between the Chinese Renminbi (RMB) and the Brazilian Real (BRL), designed to enhance efficiency and reduce intermediation in bilateral trade settlements.
These initiatives are crucial for building a robust financial ecosystem that supports the real economy and deepens economic integration between the two nations.
Capital market integration deepens
Both central banks welcomed the Brazilian government's intention to issue sovereign panda bonds, anticipating more issuances by high-quality Brazilian enterprises.
This aims to diversify funding sources and deepen capital market integration.
Support was also expressed for the pilot program for China-Brazil Bond Connect, designed to facilitate cross-border investment in debt securities.
The China-Brazil Fund was encouraged to actively identify investment opportunities in Brazil, fostering direct capital flows.
Discussions further explored the potential of the SML (Sistema de Pagamentos em Moeda Local) and broader payment system cooperation, with the goal of providing safe and efficient payment and clearing services for bilateral trade.
These efforts collectively enhance financial infrastructure and investment channels between the two countries.
A vital bridge for financial ties
The Working Group has proven instrumental in fostering a local currency ecosystem and aligning financial services with the real economy, effectively deepening bilateral cooperation.
Its strategic guidance and policy coordination are crucial for implementing the meeting outcomes and ensuring sustained progress.
This structured dialogue provides a robust framework for China and Brazil to navigate complex financial landscapes and achieve shared economic objectives.