Angola makes Chinese Yuan its second legal tender

(Agence Ecofin) - Angola has formed a monetary agreement with China which makes the Yuan the second legal tender in the second top African producer of crude oil, announced the Angolan minister of Trade, Rosa Paca, on 3 August.

The Kwanza will also be accepted in China, according to this agreement which will allow Angola to import more Chinese goods and to be less dependent on the dollar.

The new agreement is also evidence of the efforts made by Beijing to speed up the internationalisation of its currency. The red note is already used as payment and reserve currency in many African countries: Ghana, Nigeria, Mauritius, Zimbabwe and South Africa. China has also formed currency exchange agreements (swaps) with other central banks (South Africa, Russia, Qatar, Hong Kong, Canada…) in order to create an international monetary network in view of the free trade and circulation of the Yuan outside its borders.

But the International Monetary Fund has just expressed reservations on the possibility of the Yuan to be included five years from now in the currency basket which makes up the Special Drawing Rights. According to the institution, the Chinese currency “must make more progress” to aspire to be part of the inner sanctum of global reserve assets, made up of the Dollar, Euro, Pound Sterling and Yen.