Bank enables Tanzania traders to pay in Chinese currency

Tanzanians doing business with their Chinese counterparts can now pay for their supplies from the Asian nation directly in the latter’s currency, the Chinese Yuan Renminbi (CNY), thanks to a new initiative by the National Bank of Commerce (NBC).

The bank yesterday launched the initiative -- a new offering -- which will enable Tanzanian traders and businesses to pay for goods and services supplied by Chinese firms directly by using the Yuan, therefore, reducing costs incurred through exchange rates from purchasing other currencies.

“We are aware that Tanzania is still a young market and that financial services still have a long way to go, but I believe that we are making significant progress and in the right direction....with the growing business transactions between the two nations, this is one of the best products that we can offer to our clients,” said the NBC’s Treasury head, Pius Tibazarwa.

Bank of Tanzania (BoT) figures indicate that Tanzania’s exports to the world’s second largest economy went up by nine times between 2005 and 2010. It was Sh101 billion in 2005 but reached Sh908 billion in 2010.

In 2011, the total trade volume between the two countries reached $2.15 billion, and last year it hit the $2.5 billion mark. Analysts project that trade between China and Tanzania will continue to grow at more than 15 per cent annually.

The BoT attributes the increase in trade volumes between the two countries to receipts from travel and trade of manufactured goods as well as traditional exports.

During the last decade Chinese investment in Africa increased from $900 million in 2000 to $68 billion in 2010 aided by its ‘ChinaAfrica” policy – trading with Africa without any conditions.

A recent survey released by a Hong Kong-based bank, HSBC, has it that by 2015, one-third of China’s international business transactions will be made in Chinese Yuan.
Source: The Citizen, reported by Victor Karega from Dar es Salaam, Tanzania
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