Business / International
Africa could dump US$ for China's Renminbi
30 Aug 2011 at 07:02hrs | Views
China's renminbi could replace the dollar as the main currency to finance trade between Chinese and African countries, Business Day reported on Tuesday, citing research by Standard Bank.
In a sign of China's growing influence as Africa's largest trading partner and investor, Standard Bank estimated that up to 40%, or $100 billion, of China's trade would be denominated in renminbi by 2015.
This amounted to more than the total Sino-African trade last year, the bank's Beijing-based economist Jeremy Stevens said in a research paper released on Monday .
The Chinese currency already accounts for 13% of the South African Reserve Bank's trade- weighted exchange rate for the rand, making it the third most important currency in the basket. Stevens said China had no intention of "dumping" the dollar, but merely wanted to broaden its currency's geographical reach and allow the renminbi to be used for investment purposes.
"The change, which will be gradual, is symptomatic of a more multi polar world," he said.
In a sign of China's growing influence as Africa's largest trading partner and investor, Standard Bank estimated that up to 40%, or $100 billion, of China's trade would be denominated in renminbi by 2015.
The Chinese currency already accounts for 13% of the South African Reserve Bank's trade- weighted exchange rate for the rand, making it the third most important currency in the basket. Stevens said China had no intention of "dumping" the dollar, but merely wanted to broaden its currency's geographical reach and allow the renminbi to be used for investment purposes.
"The change, which will be gradual, is symptomatic of a more multi polar world," he said.
Source - businesslive
