According to the Brazilian government on Wednesday, China and Brazil have agreed to trade in their respective currencies instead of using the US dollar as a middleman. This is Beijing’s newest attack on the all-powerful dollar.

The agreement will make it possible for Brazil, the largest economy in Latin America, and China, the main challenger to US economic hegemony, to carry out their extensive trade and financial activities directly, exchanging yuan for reais and vice versa instead of using the US dollar.

The Brazilian Trade and Investment Promotion Agency (ApexBrasil) issued a statement saying, “The hope is that this would cut costs, stimulate even greater bilateral trade, and facilitate investment.”

With record-breaking bilateral trade of $150.5 billion last year, China is Brazil’s largest trading partner.

The agreement was made public following a high-level business summit between China and Brazil in Beijing and follows a preliminary agreement in January.

The high-profile visit to China that Brazilian President Luiz Inacio Lula da Silva had planned to make to the conference had to be postponed indefinitely Sunday due to pneumonia.

The transactions will be carried out by the Industrial and Commercial Bank of China and Bank of Communications BBM, according to officials.

Similar currency agreements exist between China and Pakistan, Russia, and a number of other nations.