According to a report by British Reuters on July 22, Angola's second-largest commercial bank, the Angola Development Bank, will join the Cross-border Payment System for the Renminbi (CIPS), in order to meet the growing demand from customers for direct settlement in Renminbi.
Reports indicate that as China-Africa economic and trade relations continue to deepen, the use of the Chinese yuan in Africa is expanding. To meet this demand, various banks have developed related infrastructure.
Through our customer feedback, we realize that it is necessary for us to shift our financial transactions with China to the CIPS system. Industry insiders claim "If we continue to adopt a wait-and-see attitude, we may even lose our cooperation relationship with Chinese clients."
Sources said that this will make the Angola Development Bank the first bank in the country to connect to CIPS, with plans to complete the necessary procedures by next year.
According to Reuters, although the US dollar remains the dominant currency for global trade settlements and foreign exchange reserves, with the increasing economic and trade relations with China, more and more African governments, businesses, and financial institutions are starting to use the Chinese yuan.
In November last year, Standard Bank of South Africa became the first African bank to connect to the CIPS. In June this year, the bank collaborated with the Industrial and Commercial Bank of China, obtaining authorization to conduct Renminbi clearing services on the African continent. This further promotes the development of the Renminbi cross-border payment network in Africa.
Earlier this month, the Central Bank of Angola announced that the Chinese yuan will be included in the range of currencies that commercial banks can use to meet their foreign exchange reserve requirements, thereby giving the yuan an equal status to the US dollar, euro, and South African rand.
On the 20th, Dorivaldo Teixeira, head of debt management at Angola’s Ministry of Finance, stated that they are developing a plan to issue debt financing denominated in RMB, hoping to obtain more funds with the lower financing costs associated with the RMB.
Sources believe that a series of recent measures taken by the Angolan government have further strengthened the bank’s decision to join CIPS, and changes in the international trade landscape are also an important driving factor.
Historically, we have almost never seen Chinese suppliers or clients demand the use of Renminbi settlement. They were more inclined to hold US dollars. This shift in the landscape is closely related to the development direction of international trade, changes in geopolitical landscapes, and new market trends.
