currency swap

According to the Sunday reports the central bank governors of China and Brazil have come to the agreement to enable the trade between the two states in national currencies instead of dollar. Talking at the Bank for International Settlement's annual general meeting in Basel People's Bank of China Gov. Zhou Xiaochuan and Banco Central do Brazil President Henrique Meirelles said they would study how to implement the plan.

On Monday the Federal Reserve signed additional agreements with the four central banks, including Japan, Switzerland, the United Kingdom and the European Union. To date the Fed established or expanded 14 currency swap agreements since the inception of the credit crisis. Under these arrangements the U.S. central bank provides dollars in exchange for reserves of the other nations' currencies.