- Bloomberg said that the Bank of China’s office in Zambia is working to promote yuan trading throughout southern Africa.
- China is challenging the US dollar’s hegemony with this newest move in the de-dollarization process.
- China is the world’s greatest consumer of copper, whereas Zambia is Africa’s second-largest producer.
Bank of China eyes de-dollarization move
The Bank of China office in Zambia is pushing for increased yuan transactions between the country and its neighbors.
China’s only bank in Zambia, the state-owned company serves as a clearinghouse as well. In terms of assets, it is the fourth-biggest bank globally.
As reported by Bloomberg, the bank’s vice president Lin Jingzhen declared, “We will sincerely act upon our responsibility and leverage our role in Zambia to support other African countries to provide holistic services and products related to RMB and to promote the use of RMB in bilateral trade and economic activities.”
Beijing has a major supply-chain stake in Africa, even if it has supported the de-dollarization trend of nations looking to lessen their reliance on the US dollar.
China is the world’s biggest copper consumer, whereas Zambia is the second-largest producer of copper worldwide and the seventh-largest producer in Africa.
Additionally, 70% of Zambia’s international export revenue comes from copper. The country’s economy has been shaky since the outbreak, and this year’s rising inflation has driven the kwacha to a record low. China assisted the nation in reaching an agreement to restructure $6.3 billion in debt that was owed to foreign governments in June.
China has also been a driving force behind the dedollarization of other African nations. Egypt denominated its first “panda bonds” in yuan earlier this year.
Furthermore, China has inked other currency swap agreements with nations outside of Africa, including Saudi Arabia and Argentina, which has promoted the renminbi’s use on a worldwide scale.
