Angola adds Chinese yuan to bank reserves in move to diversify foreign currency holdings

Tuesday 14 July 2026 - 19:15

By: Azzat Manal

Angola adds Chinese yuan to bank reserves in move to diversify foreign currency holdings

Angola has officially added the Chinese yuan to the list of foreign currencies that commercial banks can use to meet mandatory reserve requirements, marking a significant step in the country's efforts to diversify its financial system and strengthen monetary stability.

The decision, announced by the National Bank of Angola, allows banks to hold reserve assets denominated in yuan alongside the U.S. dollar, euro, and South African rand. The measure is expected to provide greater flexibility for financial institutions in managing liquidity while reflecting Angola's evolving economic partnerships.

The policy comes as economic ties between Angola and China continue to deepen. China remains Angola's largest trading partner and a major buyer of its crude oil exports. Over the past two decades, Chinese financing has supported numerous infrastructure projects across the country, including highways, railways, energy facilities, and public works.

Financial analysts say the inclusion of the yuan recognizes the growing role of the Chinese currency in international trade and investment. As commercial exchanges between Angola and China expand, greater use of the yuan could reduce transaction costs, facilitate cross-border payments, and improve efficiency in bilateral trade.

The move also aligns with China's broader strategy to promote international use of its currency. Beijing has expanded yuan settlement mechanisms in several emerging markets, particularly across Africa, encouraging businesses and financial institutions to conduct trade using the Chinese currency rather than relying exclusively on the U.S. dollar.

Despite these developments, the U.S. dollar continues to dominate global trade and international reserve holdings. However, many emerging economies have begun diversifying their reserve portfolios to reduce exposure to currency volatility and strengthen financial resilience.

Economists believe Angola's new policy could enhance liquidity management within the banking sector while easing pressure on foreign exchange reserves. It may also improve access to foreign currencies for businesses engaged in international trade and investment.

Market observers expect the long-term impact of the decision to depend on the pace of yuan adoption by commercial banks and companies. Nevertheless, the measure reflects a broader global trend in which several developing economies are seeking more diversified reserve structures and greater flexibility in managing international financial transactions.