China’s two largest banks land in Bolivia to inject yuan

The two largest banks in China They landed on Friday in Bolivia given the Bolivian government’s policy of using yuan in international transactions and thus reducing dependence on the US dollar, the Central Bank (BCB) reported.

Executives from the Industrial and Commercial Bank of China (ICBC) and the Bank of China “They met on Friday with representatives of the Bolivian financial system” to offer their services and “promote the use of the yuan”The BCB said in a statement.

“Currently the yuan is the fifth most active currency in global payments”said BCB president Edwin Rojas.

Bolivia joins Brazil and Argentina in the use of the Chinese currency in foreign trade operations. In the Bolivian case, it began to be used due to the shortage of dollars that the already weakened Bolivian economy has faced since the beginning of the year due to the reduction of its reserves in the US currency.

Until last July, transactions in the Chinese currency reached 10% of Bolivian foreign trade. Exporters of bananas, zinc and wood products are using yuan, Economy Minister Marcelo Montenegro said at the time.

Last May, halfway through his five-year term, President Luis Arce proposed “trade more in yuan than in dollars in the face of an adverse international economic context,” but also for “geopolitics” in the face of China’s growth in international trade.

China is Bolivia’s seventh trading partner by export volume with 5.7% of the total exported in 2022, but trade between the two countries is growing.

The Asian country has become Bolivia’s most important partner for the future exploitation of lithium. Two Chinese companies have committed this year an investment estimated at US$2 billion for the production of lithium carbonate starting in 2025 in one of the largest salt flats in the world located in southern Bolivia.

Source: EFE