Beijing and Brasilia have signed an agreement on trade in mutual currencies, abandoning the US dollar as an intermediary, and are also planning to expand cooperation on food and minerals.

According to media reports, the deal will enable the two BRICS members to conduct their massive trade and financial transactions directly, exchanging renminbi for real and vice versa, instead of using the US dollar for settlements.

“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 on Wednesday.

The countries also reportedly announced the creation of a clearinghouse that will provide settlements without the US dollar, as well as lending in national currencies. The move is aimed at facilitating and reducing the cost of transactions between the sides, and getting rid of dollar dependence in bilateral relations.

The People's Bank of China (PBOC) announced earlier that such arrangements will boost the usage of the renminbi for cross-border transactions between enterprises and financial institutions in the two countries, and further facilitate bilateral trade and investment.

China has been Brazil's largest trading partner for more than a decade, with bilateral trade hitting a record $150 billion last year.

According to the Secretary for International Affairs at the Ministry of Finance of Brazil, Tatiana Rosito, 25 countries are already making settlements with China in yuan.