China will promote its currency for settling trade and investment with Africa, the China Daily reported today, citing Li Dongrong, the assistant governor of the People’s Bank of China.
China’s central bank will encourage the use of the yuan, also known as the renminbi, as demand for the currency in Africa increases and the continent’s economy expands, Li said at a forum in Beijing yesterday, according to the report. More African nations will include the yuan in their foreign-reserve portfolios, the newspaper said, citing unidentified central-bank governors at the forum.
Bank of Ghana decided to use the renminbi as part of its settlement and reserve currency in January, China Daily reported, citing Millison Narh, the bank’s second deputy governor. The Bank of Zambia has yet to decide on including the Chinese currency in its reserves but does expect increased use of it for trade settlements with China, the article cited Michael Gondwe, the bank’s governor, as saying.
An economic rebound in Europe or the U.S. would curb use of the yuan, as central banks would prefer to hold euros and dollars as their exchange rates strengthen, Narh said, according to the report.