China refines its global yuan push

China is using its position as the world’s largest creditor to help broaden usage of the yuan, offering overseas borrowers the chance to benefit from economically depressed interest rates at home by ditching the dollar.

- BLOOMBERG NEWS

Ethiopia last week became the latest country looking to convert at least part of the $5.38 billion owed to Beijing into yuan-denominated loans. A growing number of sovereign debt issuers are also seizing on cheaper Chinese financing via bonds.

But the strategy is coming at a price to China, forcing it to stomach some losses along the way as domestic rates hover well below those on the dollar. Kenya said it cut annual debt-servicing costs by $215 million by converting its Chinese railway loans from dollars earlier this month.