A money exchange shop worker in La Paz, Bolivia, is seen counting Chinese yuan banknotes in an AP photo. Bolivia’s state-run bank, Banco Union, has recently started conducting transactions using the yuan, marking a significant shift away from the U.S. dollar. From May to July of this year, Bolivia carried out financial operations worth 278 million Chinese yuan ($38.7 million), accounting for 10% of its foreign trade during that period. Economy Minister Marcelo Montenegro expressed his satisfaction with this development during a news conference, stating that banana, zinc, and wood manufacturing exporters, as well as importers of vehicles and capital goods, are now using the yuan for transactions. These electronic transactions are facilitated through the state-owned Banco Unión, and while the current usage of yuan in Bolivia is relatively small, Montenegro believes that it will increase over time. Bolivia joins other South American countries, such as Brazil and Argentina, in integrating the yuan into their financial systems. These three countries, all governed by leftist or left-leaning governments, are seeking to establish stronger ties with China and reduce their reliance on the U.S. dollar. The rise in yuan usage comes as China’s presence in the region expands through increased trade and investment. The use of the yuan provides an alternative to the dollar, which has become more expensive due to rising interest rates. However, some analysts and opposition members have raised concerns about the long-term viability of this shift. Despite the growing popularity of the yuan, experts agree that a large-scale transition away from the dollar is unlikely in the near future due to the limited accessibility of the Chinese financial system. Nevertheless, China’s efforts to challenge the global dominance of the dollar are gaining traction, as more countries become receptive to the idea of diversifying their currencies.
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Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
