UPDATE 1-China FX policy a problem for BRICs-Brazil source

(Adds comments on trade and currencies, background)

ST ANDREWS, Scotland, Nov 6 (Reuters) - China's decision to maintain its yuan CNY= at a fixed exchange rate against the dollar is a problem for major developing nations, a Brazilian finance ministry source told Reuters on Friday.

"What is a concern is China's fixed exchange rate," the source said on condition of anonymity. "The whole problem is China."

The source was referring to attempts among "BRIC" emerging nations -- Brazil, Russia, India and China -- to adopt a common position on foreign exchange and other issues at this weekend's meeting in Scotland of finance officials from the Group of Twenty nations.

Deputy finance ministers from the BRICs met on Thursday evening in an attempt to coordinate positions. The talks were continuing on Friday, the Brazilian source said.

The weak Chinese currency gives China a competitive advantage in trade against other countries, the source added.

"Either all countries should have a fixed exchange rate or all should have a floating exchange rate."

China has kept the yuan almost flat against the dollar since the financial crisis began worsening in mid-2008. Developed countries have long criticised China's foreign exchange policy, and in the last few weeks Brazil has started to voice concerns.

The Brazilian real BRY= has appreciated sharply against the dollar this year. (Reporting by Axel Bugge; Editing by Andrew Torchia)