Ecobank rolls out yuan payments to target surging Africa-China trade

Why is Ecobank adopting yuan payments?

Ecobank has integrated Chinese yuan payment channels across its African banking network, positioning itself to capture a larger share of the growing trade corridor between Africa and China.

The pan-African lender's decision to establish direct renminbi settlement channels aims to bypass the traditional dependency on the US dollar. Traditionally, African businesses trading with China have had to route payments through US intermediary banks, converting local currencies to dollars and then to yuan. This double conversion adds significant transaction fees and exposes businesses to exchange-rate volatility. By clearing transactions directly, Ecobank hopes to lower costs and speed up trade settlement for businesses operating across its 33 African markets.

How strong is the Chinese yuan?

This expansion of yuan-based trade infrastructure comes as the currency displays notable strength. In recent trading, the onshore yuan rose to 6.6987 per dollar, up 46 pips from the previous session's close, while the offshore yuan traded at 6.6986.

To anchor this momentum, the People’s Bank of China set its daily midpoint fixing at 6.7330 per dollar—its strongest level since 2 February 2023, though still 357 pips weaker than market estimates compiled by Reuters. The onshore yuan is allowed to trade within a strict 2% band on either side of this daily fixing. Supported by strong exports and policy efforts to attract foreign capital, the yuan has gained 4.4% against the dollar this year, and nearly 9% since the end of 2024.

Why is the EU-China trade deficit growing?

The yuan's appreciation has coincided with rising trade friction between Beijing and its major Western partners. European Union trade officials recently held two days of talks with their Chinese counterparts in Beijing to address a lopsided trade relationship. The EU's daily goods trade deficit with China now exceeds €1 billion ($1.12 billion).

European policymakers have repeatedly called for a stronger yuan to help correct this imbalance, arguing that an undervalued currency makes Chinese exports artificially cheap. Beijing has pushed back firmly against these accusations. During the Beijing talks, China's central bank rejected foreign claims of undervaluation, stating that the country has never engaged in competitive currency depreciation. Instead, Chinese officials argue that global trade imbalances are driven by broader structural factors rather than exchange-rate manipulation.

While analysts expect Beijing to continue managing the yuan to limit excessive volatility, the currency is projected to maintain a gradual appreciation bias. For African traders using Ecobank's new channels, this could provide a more stable, predictable alternative to a volatile US dollar.