The BRICS New Development Bank (NDB) is advocating the use of the Chinese yuan to fund projects across the Global South. Bank officials cite the currency’s stability and the low borrowing costs in China’s onshore bond market, which they call a cost-effective global funding source. This shift aims to reduce foreign exchange costs for developing nations and is part of a broader push by Chinese President Xi Jinping to increase the yuan’s international role.
The BRICS New Development Bank is promoting the Chinese yuan for funding infrastructure in the Global South. The bank’s director stated that the yuan offers low borrowing costs and stability against the US dollar.
Zhongxia Jin, the NDB’s Director General for Treasury and Portfolio Management, said China’s bond market is now a highly cost-effective funding source globally. He described it as a key pillar of the future financial architecture.
“We don’t just see the Chinese bond market as a source for cheap cash; we see this market as the future of local currency finance,” Zhongxia stated. The move is seen as a strategic step to strengthen the yuan’s position in forex markets.
President Xi Jinping has long pushed for the yuan’s increased use within the NDB. The bank shifted its lending from US dollars to Chinese yuan in 2022.
The NDB also uses currencies like the Indian rupee and Russian ruble for loans. These loans primarily support projects in Latin America and the African continent.
