FX.co ★ China challenges greenback's dominance

Business Insider reported that the People’s Bank of China is an active supporter of the de-dollarization move in Africa. The country’s authorities are pushing the yuan to be used instead of the greenback, especially in trade relations with Zambia, the main copper producer.

It is a shrewd maneuvering. No one can imagine how the situation will develop if African countries accept the Chinese yuan.

At present, Zambia is the second largest copper producer in Africa, while China is the biggest consumer of this metal in the world. Thus, copper contributes to 70% of Zambia's foreign export earnings. Zambia's economy has been suffering the aftermath of the coronavirus pandemic and high inflation. Against this backdrop, the kwacha, Zambia’s national currency, dropped to record lows in 2023. However, China helped the country strike a deal to restructure $6.3 billion in debt owed to foreign governments.

Curiously, the Bank of China has its office in Zambia. It is China's only bank in Zambia that 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," Lin Jingzhen, the bank's vice president, said.