This should be interesting to see how it plays out. China, as it says in the article, has put a reasonable amount of investment into the African region, thus making many of them have debts to...
This should be interesting to see how it plays out. China, as it says in the article, has put a reasonable amount of investment into the African region, thus making many of them have debts to China. The international community (Read: US and EU) are not super fond of people making widespread use of the RMB because its not curated in the same way as USD/EUR. The RMB is controlled by the CCP to stay within a trading rate that the Chinese feel acceptable. This is more restrictive than how the Western world deals with exchange rates as well as being a fairly new phenomenon. Up until around 2015 or so the RMB was controlled to stay within a very tight band. You can read here for more information on this topic.
The upshot of this is that the IMF as well as the World Bank are not super fond of countries switching over to RMB for regular use because it does not adhere to the status quo that most other currencies fall into. This will be an interesting litmus test to see how the Western world will react when other countries inevitably do this in the future (Due to the One Belt One Road Initiative and investments from the Asian Infrastructure Investment Bank).
This should be interesting to see how it plays out. China, as it says in the article, has put a reasonable amount of investment into the African region, thus making many of them have debts to China. The international community (Read: US and EU) are not super fond of people making widespread use of the RMB because its not curated in the same way as USD/EUR. The RMB is controlled by the CCP to stay within a trading rate that the Chinese feel acceptable. This is more restrictive than how the Western world deals with exchange rates as well as being a fairly new phenomenon. Up until around 2015 or so the RMB was controlled to stay within a very tight band. You can read here for more information on this topic.
The upshot of this is that the IMF as well as the World Bank are not super fond of countries switching over to RMB for regular use because it does not adhere to the status quo that most other currencies fall into. This will be an interesting litmus test to see how the Western world will react when other countries inevitably do this in the future (Due to the One Belt One Road Initiative and investments from the Asian Infrastructure Investment Bank).