BRICS To Convert US Dollar Loans Into Chinese Yuan
Ethiopia, a member of the BRICS bloc, is negotiating with China to convert $5.38 billion of its US dollar-denominated loans into Chinese yuan. The MOVE aims to strengthen Ethiopia's local currency and reduce foreign exchange costs. Central Bank Governor Eyob Tekalign confirmed the discussions, highlighting potential savings similar to India's $7 billion reduction in forex expenses through local currency oil transactions.
China's push to internationalize the yuan aligns with Ethiopia's request, though Beijing has yet to formally respond. Approval from the People's Bank of China WOULD mark another step in the yuan's ascent as a global settlement currency. A broader BRICS adoption of yuan-based loans could accelerate the dollar's decline in international finance.
