Growing trade between China and Africa, combined with Beijing’s removal of tariffs on goods from 53 African countries in May, is accelerating yuan use across the continent. China-Africa trade expanded nearly 18% last year, and IMF research shows yuan adoption tends to rise alongside trade exposure to China. This is because settling transactions in yuan helps businesses reduce currency conversion costs and borrowing expenses. Banks are responding: South Africa’s Standard Bank became the first African lender to join China’s Cross-Border Interbank Payment System, processing $500 million in its first four months, while Standard Chartered Kenya has begun issuing yuan-denominated letters of credit. Executives say the shift mainly reflects expanding trade rather than a deliberate move away from the dollar, though some view it as part of a broader push to dilute dollar dominance.
Reuters
