China Advances Yuan Internationalization with New African Trade Agreements

China has formally extended yuan-denominated trade and financing arrangements to 14 African nations in 2025, including Nigeria, Kenya, and Angola, according to official trade records. These agreements enable local businesses to invoice, settle, and finance transactions in renminbi (CNY), reducing reliance on the U.S. dollar. The expansion follows an initial wave of CNY trade corridors established in 2022 and 2023, now covering over 35% of China’s total African trade volume. The initiative is part of a broader effort to internationalize the yuan, aligning with China’s Belt and Road Initiative (BRI) and long-term economic strategy. As of January 2026, CNY/USD exchange rates have stabilized near 7.21, reflecting increased demand from African importers and exporters. Meanwhile, CNY-denominated bonds issued by African sovereigns have reached $1.8 billion in cumulative issuance, up from $600 million in 2023. Financial institutions in the region are adapting: the Industrial and Commercial Bank of China (ICBC) has opened yuan clearing centers in Lagos and Nairobi, while the African Export-Import Bank has activated CNY liquidity lines totaling $750 million. These developments are particularly impactful in commodity trade, with over 40% of China’s African iron ore and copper imports now settled in yuan. The shift could influence global currency dynamics, potentially reducing demand for U.S. dollar reserves among emerging market central banks. FXI, the China ETF, rose 3.4% in early 2026 on optimism over yuan adoption, while AUD/USD and EUR/USD saw modest volatility as markets reassessed reserve currency diversification trends.