According to new media reports, China and Brazil have inked an agreement to abandon the dollar as a currency intermediary in trade deals, instead settling in mutual currencies. The parties also pledged to increase cooperation on food and minerals.

Now the massive financial and trade transactions between the two BRICS members will be conducted directly, trading renminbi for real, and real for renminbi, instead of being forced to trade into dollars as an intermediary.

On Wednesday the Brazilian Trade and Investment Promotion Agency was quoted by AFP as saying, “The expectation is that this will reduce costs… promote even greater bilateral trade and facilitate investment.”

The two nations have also announced they have created a clearinghouse which will be able to lend in national currencies, as well as provide settlements absent the US dollar. The move will both ease settlements of transactions and reduce the costs between sides involved, as it removes the dollar dependence in bilateral relations.

According to the People’s Bank of China, the arrangements will increase the usage of the renminbi in international transactions between enterprises and financial institutions in both nations, as it further encourages bilateral trade and investment.

China seized the mantle of Brazil’s largest trading partner over a decade ago, with trade between the two nations reaching a record of $150 billion last year.

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