LA PAZ, Bolivia (AP) — Bolivia is now using the yuan to pay for imports and exports, becoming the latest country in South America to regularly use the Chinese currency in a small but growing challenge to the hegemony of the U.S. dollar for international financial transactions in the region.
Between May and July of this year, Bolivia conducted financial operations amounting to 278 million Chinese yuan ($38.7 million), which accounts for 10% of its foreign trade during that period, Economy Minister Marcelo Montenegro said on Thursday.
“We’re already using the yuan. It’s a reality and a good start,” Montenegro said during a news conference. “Banana, zinc, and wood manufacturing exporters are conducting transactions in yuan, as well as importers of vehicles and capital goods.” These electronic transactions are carried out through the state-owned Banco Unión.
“The amount being used in yuan is still relatively small, but it will increase over time,” Montenegro said.
With these transactions, Bolivia joins other countries in South America, most notably Brazil and Argentina, which are using the yuan. The three countries are ruled by leftist or left-leaning governments.
In Latin America and the Caribbean, the use of the yuan is growing especially “in those countries that are looking to establish stronger ties with China, that view themselves as in some way politically aligned on this particular objective on decreasing their overall reliance on the dollar and on the U.S. in general,” said Margaret Myers, director of the Asia & Latin America Program at the Washington-based Inter-American Dialogue.
The use of the yuan comes at a time when China’s footprint in the region is increasing with rising trade and investment.
“There is a lot of anxiety in Washington about threats to the special role of the dollar in regions like Latin America,” Benjamin