Bank of China eyes de-dollarization move in Africa, pushing the yuan in a top copper producer
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- The Bank of China's office in Zambia is pushing to increase trade using yuan in southern Africa, Bloomberg reported.
- The move is the latest in the de-dollarization trend as China challenges the greenback's dominance.
- Zambia is Africa's second-largest copper producer, and China is the world's largest copper consumer.
The Bank of China's office in Zambia is pushing the yuan to be used in more trades with the African nation and its neighbors.
The state-owned lender, which is the world's fourth biggest by assets, is China's only bank in Zambia and serves as a clearing facility.
"We will earnestly 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," said Lin Jingzhen, the bank's vice president, according to Bloomberg.
While China has been a champion of the de-dollarization trend of countries attempting to reduce their dependence on the greenback, Beijing also has a key supply-chain interest in Africa.
Zambia is Africa's second largest — and the world's seventh largest — copper producer, and China is the world's largest consumer of the metal.
Copper also contributes to 70% of Zambia's foreign export earnings, and its economy has been wobbling in the aftermath of the pandemic, with high inflation driving the kwacha to a record low this year. In June, China helped the country strike a deal to restructure $6.3 billion in debt owed to foreign governments.
China has been advancing the de-dollarization shift in other African countries as well. Earlier this year, Egypt issued yuan-denominated "panda bonds" for the first time.
And beyond Africa, China has signed multiple currency swap agreements with countries like Argentina and Saudi Arabia, further encouraging global use of the renminbi.