Ethiopia plans to convert U.S. dollar loans into Chinese yuan to reduce interest rates.

Foreign media: Ethiopia plans to convert its U.S. dollar-denominated Chinese loans into RMB, a move seen as "shrewd financial arbitrage."

Etienne Ndiaye, Governor of the Ethiopian Central Bank, confirmed that negotiations have been initiated with the China Exim Bank and the People's Bank of China to convert part of the 5.38 billion U.S. dollar loan into RMB. This move could reduce the interest rate from 7.25% to 3%, providing crucial financial support for Ethiopia in restructuring about 15 billion U.S. dollars in foreign debt.

Previously, Kenya had converted 3.5 billion U.S. dollars in Chinese loans into RMB, saving 215 million U.S. dollars annually in debt service costs. This trend also aligns with China's strategy to promote the internationalization of the RMB, while Sri Lanka and Hungary have also turned to RMB for cheaper financing.

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Original: www.toutiao.com/article/1846858580389900/

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