The Central Bank of Bolivia (CBB) has welcomed ICBC and BOC, two major Chinese banks, to bolster the use of the yuan in Bolivia-China trade.
Executives from these banks met in Santa Cruz de la Sierra. They briefed local financial experts on services to boost yuan use.
CBB President Edwin Rojas says trade with China is growing. In 2022, it made up 7.6% of Bolivia’s GDP and 12% of total trade.
China now ranks as Bolivia’s third main trading partner.
Rojas also notes the yuan’s rising global role. It’s the fifth most-used currency in international payments. Plus, it’s gaining a spot in global reserves.
Rojas emphasizes the yuan’s potential to replace the U.S. dollar. He points out that global rules limit local financing options. So, using the yuan could be a smart move.
The meeting was part of a broader plan. Bolivia and China have a Memorandum of Understanding. It aims to increase cooperation under China’s Belt and Road Initiative.
Background Bolivia-China Trade
This development is timely. Cryptocurrencies and digital currencies are making headlines. Yet, the yuan’s push into Bolivia signals traditional currency moves are still big news.
China is extending its financial reach, especially in South America. Bolivia’s decision to welcome Chinese banks shows open economic doors between the two countries.
Trade with China already plays a big role in Bolivia’s economy. So, bringing in Chinese banks makes sense.
It eases trade and might lower costs. Furthermore, it aligns Bolivia with a growing global trend.
Many countries are shifting focus from the U.S. dollar to other options.
This move also helps Bolivia diversify its financial instruments. Reducing reliance on the dollar can be a safeguard against economic shocks.
Finally, this fits into China’s Belt and Road plans. That initiative aims to increase China’s global influence through trade partnerships.
Overall, Bolivia seems to be positioning itself wisely in the changing landscape of global finance.