Yuan Loans Surge, Challenging Dollar Dominance
Update: 2025-12-19
Description
Chinese banks are increasingly lending in yuan to overseas borrowers, a trend thats rapidly catching up to dollar loans. This surge is driven by attractive pricing, as yuan interest rates are currently lower than dollar rates. The market is gaining momentum, with more people wanting to hold and spend yuan. This shows real progress in Chinas goal of globalizing its currency. Non-Chinese companies raised record amounts in Chinas onshore and offshore markets earlier this year. Foreign currency lending, mostly in dollars, dropped while yuan lending reached new highs. The main reason for this shift is the price, with yuan funding costs being lower than dollar costs since 2022. Beyond favorable financing, political tensions and tariffs are also encouraging countries to use the yuan more, benefiting Chinas infrastructure projects and reducing exchange rate risks for foreign companies.
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