The East African nation and fellow Brics member is the latest country to seek a switch, accelerating the yuan’s internationalisation.

Ethiopia’s plan to convert its dollar-denominated Chinese loans to yuan is a “savvy financial arbitrage play” in the view of some analysts, while others warned that the move could “complicate” negotiations with bondholders over the 2023 Eurobond default. Eyob Tekalign, governor of the Ethiopian central bank, confirmed last week that Addis Ababa had initiated talks with Chinese lenders, including the Export-Import Bank of China (China Eximbank) and the People’s Bank of China, to swap part of its…

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