Libyan banks are to join the Chinese payment system CIPS
Libyan banks are set to join China’s Cross-border Interbank Payment System (CIPS) following talks in Beijing between the governor of the Central Bank of Libya, Naji Issa, and the governor of the People’s Bank of China, Pang Gongsheng. This is expected to enable direct interbank settlements in yuan for trade, according to the South China Morning Post.
According to the state-run Libyan News Agency, connecting to CIPS is expected to simplify commercial transactions, speed up cross-border transfers, and increase trade flows. Libya also plans to enter the Chinese capital market by issuing “panda bonds”—yuan-denominated debt securities that foreign issuers place in mainland China. This could help finance the country’s reconstruction following years of conflict.
The African Export-Import Bank and South Africa’s Standard Bank have already joined CIPS. Angola’s Banco de Fomento Angola is preparing to become the country’s first bank in the system amid growing local demand for direct settlements in yuan. Earlier, Angola’s central bank allowed commercial banks to use the yuan to meet their foreign currency needs.
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In January, Zambia began collecting taxes and royalties from Chinese mining companies in yuan, channeling this currency to China to finance imports and service loans. China has also entered into currency swap agreements with several African countries, including Nigeria and South Africa. Last year, Kenya converted its debt on a railway project into yuan, while Ethiopia and Mozambique are negotiating similar restructuring deals.
Standard Bank, in which the Industrial and Commercial Bank of China holds a 20% stake, has been authorized by the People’s Bank of China to clear yuan transactions in 19 African countries. On July 27, the bank reported that since the end of the previous year, it had processed 8 billion yuan—or about 1.2 billion U.S. dollars—in transactions through CIPS. Its Kenyan subsidiary, Stanbic Bank, in partnership with ICBC, has launched direct yuan clearing in Kenya, allowing local traders to settle cross-border transactions without using the U.S. dollar.
China is Africa’s largest trading partner and the main financier of large-scale projects on the continent. Bilateral trade reached a record $203.5 billion in the first half of the year. Economist Charlie Robertson noted that Beijing aims to make the yuan the primary currency for trade with Africa, although the yuan payment system is not expected to replace the dollar in the near future.
