Growing momentum to adopt Chinese Yuan as reserve currency in Africa
African central bank leaders are currently discussing whether to hold the yuan as part of their foreign reserves, highlighting the Chinese money’s rise as one of the world’s major reserve currencies.
Government officials from 14 African nations in eastern and southern Africa are meeting today (May 29) in the Zimbabwean capital Harare to discuss sovereign reserve management, according to a report from the official China press agency Xinhua. The forum is being held by the Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI), a regional establishment with members including Angola, Kenya, Tanzania, Zambia, and Tanzania. Besides strategizing on how to improve the weakened external positions of member nations during the global economic downturn, policymakers will also debate how to keep pace with large shifts in the global economy, where China has risen as a dominant and disruptive player.
“Most countries in the MEFMI region have loans or grants from China and it would only make economic sense to repay in renminbi (Chinese yuan),” MEFMI spokesperson Gladys Siwela-Jadagu said. “With China as the largest trading partner of over 130 countries, the main challenge for African countries is how to benefit from the new pattern of international commerce,” she added.