Ethiopia and China Seal Historic Currency Swap Deal: Strengthening Trade Ties











On August 30, 2016, Ethiopia and China agreed to trade in Birr and Yuan, strengthening the economic ties between the two nations. This agreement is believed to have been reached during talks between Ethiopian Prime Minister Abiy Ahmed and Chinese President Xi Jinping.

According to Finance Minister Ahmed Shide, the two countries’ national banks have agreed to collaborate closely in order to facilitate trade and enhance financial cooperation. The minister also noted that China has provided Ethiopia with 400 million yuan in financial assistance, a contribution confirmed by President Xi during their discussions.

President Xi praised Ethiopia’s macroeconomic reforms, acknowledging the nation’s efforts to stabilize its economy and promote growth. He emphasized that the partnership between Ethiopia and China is built on mutual benefit, with both countries seeking to expand their trade and investment opportunities. The agreement is expected to bolster Ethiopia’s economic stability by reducing its reliance on third-party currencies for trade with China, thus facilitating smoother financial transactions.

This move is also seen as a significant step in Ethiopia’s broader strategy to enhance its economic sovereignty and strengthen its ties with global trading partners, particularly China, which is one of Ethiopia’s largest investors. The cooperation marks a milestone in the longstanding diplomatic and economic relations between the two nations, further solidifying their role in Africa-China trade relations.