China’s campaign to expand the global use of the yuan has gained another foothold in Africa after oil-rich Angola allowed commercial banks to use the Chinese currency to meet part of their mandatory foreign-currency reserve requirements, underscoring Beijing’s growing financial influence on the continent.
According to a directive issued by the Bank of Angola on July 2 and published on Thursday, banks can now use the Chinese yuan alongside the U.S. dollar, euro and South African rand to meet foreign-currency reserve requirements.
Mandatory reserves are funds commercial banks are required to hold with the central bank to support financial stability and manage liquidity within the banking system.
While the directive appears to be a technical regulatory adjustment, it reflects Angola’s increasingly close economic relationship with China.
China has been Angola’s largest trading partner for years, buying most of the country’s crude oil exports while financing billions of dollars’ worth of roads, railways, power projects and other infrastructure over the past two decades.
