Brazil's Lula raps US dollar, IMF amid bolstering China ties

Brazil’s president has blasted the monstrous role of the US dollar in the global economy during a formal visit to China after the two nations forged a recent pact to replace the dollar with their own currencies in trade deals.

"Why should every country have to be tied to the dollar for trade? Who decided the dollar would be the world's currency?" asked President Luiz Inacio Lula da Silva at a Thursday ceremony in China’s largest city and global financial hub, Shanghai, to inaugurate his political ally Dilma Rousseff as president of the New Development Bank set up by the BRICS member nations -- Brazil, China, Russia, India and South Africa.

"Why can't a bank like the BRICS bank have a currency to finance trade between Brazil and China, between Brazil and other BRICS countries? Today, countries have to chase after dollars to export, when they could be exporting in their own currencies," added visiting Lula, who is currently touring China aiming to further expand ties with his country’s top trading partner.

The 77-year-old president, who is due to meet with his Chinese counterpart Xi Jinping in Beijing on Friday, intends to reposition Brazil as a global go-between and deal broker, spreading a message that "Brazil is back" as a key player on the global stage.

Lula’s administration declared last month that China and Brazil had reached a deal to trade in their own currencies, ditching the US dollar as an intermediary.

Under the currency deal, Brazil and China named two banks – one in each country – to conduct their massive trade and financial transactions by directly exchanging yuan for reais and vice versa, rather than going through the dollar.

China is Brazil's biggest trading partner, with a record $150.5 billion in bilateral trade last year.

Lula also lashed out at the International Monetary Fund (IMF) and accused the major financial agency of “asphyxiating” the economy of certain countries.

The Brazilian president alluded to accusations that the US-led IMF enforces overly harsh spending cuts on cash-strapped countries such as Brazil's neighbor Argentina in exchange for bailout loans.

"No bank should be asphyxiating countries' economies the way the IMF is doing now with Argentina, or the way they did with Brazil for a long time and every third-world country," Lula emphasized. "No leader can work with a knife to their throat because their country owes money."

Lula, who previously led Brazil from 2003 to 2010, is seeking to smooth relations with China, after relations deteriorated under his far-right predecessor, Jair Bolsonaro.

ME