China's Tariff Cuts Boost Trade and Yuan Adoption in Africa

China has announced new measures aimed at promoting the use of the yuan in trade with African nations, following tariff cuts that are expected to increase the flow of yuan-denominated settlements. According to research from the International Monetary Fund, the adoption of the yuan is anticipated to rise as trade exposure to China grows.

The tariff eliminations are expected to boost demand for settlements in yuan and local African currencies. Birju Sanghrajka, CEO of Standard Chartered Kenya, noted that while there are signs of yuan usage increasing, it has not yet unseated the US dollar.

Additionally, Standard Bank of South Africa has become the first African commercial bank to connect to China's Cross-Border Interbank Payment System (CIPS) as of November, processing millions in transactions within the first four months. These developments are part of China's broader strategy to enhance trade relations and support African exports.