Most of West Africa’s weak currencies may have a hurdle to jump as the Chinese further devalue their currency, the Yuan to have it accepted by the International Monetary Fund as reserve currency.
The China Central bank devalued the Yuan to be on par with the dollar, euro, yen and British pound, to boost the country’s global stature.
The devaluation is also to make its exports more competitive, following the slowdown in its economic growth.
China has been a major trading partner of Africa—trading over US$100 billion on the continent in 2014.
This current move is expected to boost the country’s exports and make it cheaper.
The demand for cheaper imports from China is expected to contribute to the depreciation of most currencies such as the Ghana Cedi and the Nigerian Naira, as both sub-regional countries are major trade partners of the Asian country.
The devaluation is likely to see business operators or importers in the sub-region move away from markets like the US and EU to China as goods from China would be cheaper than other markets.
By LAWRENCE SEGBEFIA
segbefial@yahoo.com
