LUANDA, July 11 – Angola’s central bank has added the Chinese yuan to the list of foreign currencies that commercial banks can use to satisfy mandatory foreign currency reserve requirements, marking another step in the country’s deepening financial relationship with China.
The change was introduced through a directive issued by the Bank of Angola on 2 July and published on the central bank’s website on Thursday. Under the revised framework, banks can now hold required foreign currency reserves in Chinese yuan, alongside the US dollar, euro and South African rand.
Mandatory reserves are deposits that commercial banks are required to maintain with the central bank to support financial stability, strengthen liquidity management and enhance confidence in the banking system.
The decision comes as the Chinese yuan assumes a larger role in Africa’s financial landscape, reflecting China’s position as the continent’s largest trading partner and one of its leading sources of infrastructure financing.
Despite the growing use of the yuan, the US dollar remains the world’s dominant reserve and international trade currency. However, many emerging economies have increasingly sought to diversify their foreign currency holdings in recent years, driven by concerns over dependence on the dollar, exposure to sanctions, transaction costs and the evolving balance of global economic influence.
Angola’s close economic ties with China have made the yuan increasingly relevant to the country’s financial system. China is the largest buyer of Angolan crude oil and has extended billions of dollars in financing to support infrastructure development across the Southern African nation.
The inclusion of the yuan in Angola’s reserve requirement framework is expected to provide banks with greater flexibility in managing foreign currency assets while supporting commercial and financial transactions linked to China’s growing presence in the Angolan economy.
