Chinese yuan 'conquering' Mozambique

APA-Maputo (Mozambique)

Mozambique’s central bank said Tuesday that about 10 percent of the country's foreign exchange reserves are denominated in Chinese currency, a development that highlights the increasing dominance of the yuan as the medium of global transactions.

Bank of Mozambique governor Rogério Zandamela told the 10th International Forum on Investment and Infrastructure Construction in Macao that the growing internationalization of China's currency has strengthened Mozambique's interest in making investments in yuan.

Zandamela noted that the attraction of the yuan as a global currency of choice is expected to be reinforced by the "Belt and Road" initiative, a Chinese-led project to build infrastructure to link Asia to Europe and Africa.

He said the initiative is a platform to promote the Chinese currency as a global currency through the modernization of trade routes, with the development of infrastructure.

"Notwithstanding this optimism, given the increasing use of the yuan as an international reserve currency, we cannot, however, lose sight of some of the risks and challenges associated with [its] use," the official warned, noting these risks include the likely worsening of trade relations between China and the United States.

The 2019 edition of the forum is being attended by more than 2,000 businesspersons, academics and politicians. The event is sponsored by the Chinese Ministry of Commerce and the Government of Macao.


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