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Angola Adds Chinese Yuan to List of Approved Reserve Currencies for Banks
Angola's central bank has officially added the Chinese yuan to its list of approved currencies for commercial banks' mandatory foreign reserves, signaling a further strengthening of economic ties between the African nation and its largest trading partner.
Central Bank Directive
The Bank of Angola announced the policy change in a directive dated July 2, which was published on the institution's website. The move allows national banks to use the yuan to meet their reserve requirements, which are funds held with the central bank to ensure financial stability and manage liquidity within the banking system.
The yuan now joins a select group of approved foreign currencies for this purpose, which includes:
- The U.S. dollar (USD)
- The euro (EUR)
- The South African rand (ZAR)
AdEconomic Context
The decision reflects the significant and growing economic relationship between the two countries. China is a key trading partner for Angola and a primary source of financing for major infrastructure projects. Angola, a major oil producer, is a significant supplier of crude oil to China and has received billions of dollars in loans from Beijing.
This policy change may facilitate smoother trade and financial transactions between the two nations. The inclusion of the yuan is part of a broader trend of its increasing use in Africa, driven by China's role as the continent's largest trading partner. Despite these developments, the U.S. dollar remains the world's dominant currency for international trade and central bank reserves.