Zambia will begin settling some copper sales to China in renminbi from next year, marking a shift away from the US dollar. Denny Kalyalya, the central bank governor, confirmed the plan during IMF meetings in Bangkok, noting that Chinese producers already pay Zambian taxes in yuan. The move aims to reduce currency conversion costs and exchange rate volatility for Zambia’s kwacha.
Zambia is also in talks with China for a currency swap, and hopes future lending could be denominated in renminbi. This trend is growing across Africa: Kenya has swapped $215 million in Chinese debt to yuan, saving annually on debt service with interest rates as low as 3%. Ethiopia is also converting part of its $5.4 billion debt to China into renminbi, though details remain undisclosed.
More African lenders are joining China’s Cross-Border Interbank Payment System, bypassing SWIFT.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing