Africa Eyes Yuan as US Dollar Woes Mount

BRICS member China has been actively seeking to internationalize the yuan in Africa by providing liquidity from its ballooning foreign reserve which partially offsets raising debt burden denominated in dollars.

This process corresponds with its de-dollarization initiative, which will create some doubt on the US dollar in global trade. The China Panda bonds help African countries because they are priced in yuan and thus allow for cheaper debt payments than the traditional dollar-priced sovereign debt.

As expressed by Charlie Robertson of FIM Partners, “In the future, The Fed will fade away a little bit and the People’s bank of China will appear to grow”. There is the view, which he has captured from afar, that Africa might be headed towards yuan algebra driven by the pull factors of lower interest rates across China and resource exploitation convenience with its major partner.

This change, if achieved, is likely to significantly affect the US sectors and for all its worth could reorient global financial.

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2024-01-31 00:52