Developing nations shift to Chinese yuan loans from BRICS, citing lower borrowing costs and massive savings over US dollar.
Kenya, Panama, Sri Lanka, and others are turning to BRICS member China for loans in yuan instead of the US dollar. The shift is driven by cheaper borrowing costs and currency exchange savings. Panama alone saves over $200 million by choosing yuan financing.
Kenya recently secured a $5 billion yuan loan from China’s Exim Bank for a railway project, while Sri Lanka is seeking yuan loans to restart stalled infrastructure.
Experts say this is not true de-dollarization but pragmatic economics. Borrowing in dollars costs 4.25%–4.50%, while yuan loans average just 1.4%. For many countries, the yuan simply makes financial sense.
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