Cachaça, a distilled spirit made from fermented sugarcane, is the base ingredient of the Brazilian national cocktail, the caipirinha, and increasingly popular in the United States. In Bolivia, the yuan started to be used after months of severe dollar shortages that have been impacting the country’s economy since February.The United States has now completed the process to recognize Cachaça as a distinctive product of Brazil, as a result of a 2012 exchange of letters with Brazilian Minister of Development, Industry and Foreign Trade Fernando Pimentel. In Brazil, the yuan surpassed the euro as the second most important currency in its foreign reserves at the end of 2022, when 5.37% of the central bank’s holdings were in the Chinese currency, compared to 4.74% for the euro. “China’s new role as a lender of last resort in Argentina, and the use of the yuan for international trade by Bolivia, are a sign of the times.”Įarlier this year, Argentina’s government unveiled a plan to use the yuan to pay for imports from China as a way to preserve its dwindling foreign reserves and it has raised the possibility of paying off debts with the International Monetary Fund using the Chinese currency. “There is a lot of anxiety in Washington about threats to the special role of the dollar in regions like Latin America,” Benjamin Gedan, director of the Latin America Program at the Washington-based Wilson Center, said. The use of the yuan comes at a time when China’s footprint in the region is increasing with rising trade and investment. in general,” said Margaret Myers, director of the Asia & Latin America Program at the Washington-based Inter-American Dialogue. In Latin America and the Caribbean, the use of the yuan is growing especially “in those countries that are looking to establish stronger ties with China, that view themselves as in some way politically aligned on this particular objective on decreasing their overall reliance on the dollar and on the U.S. The three countries are ruled by leftist or left-leaning governments. With these transactions, Bolivia joins other countries in South America, most notably Brazil and Argentina, which are using the yuan.
“The amount being used in yuan is still relatively small, but it will increase over time,” Montenegro said. “Banana, zinc, and wood manufacturing exporters are conducting transactions in yuan, as well as importers of vehicles and capital goods.” These electronic transactions are carried out through the state-owned Banco Unión. It’s a reality and a good start,” Montenegro said during a news conference. dollar for international financial transactions in the region.īetween May and July of this year, Bolivia conducted financial operations amounting to 278 million Chinese yuan ($38.7 million), which accounts for 10% of its foreign trade during that period, Economy Minister Marcelo Montenegro said on Thursday. LA PAZ, Bolivia (AP) - Bolivia is now using the yuan to pay for imports and exports, becoming the latest country in South America to regularly use the Chinese currency in a small but growing challenge to the hegemony of the U.S.
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