The BRICS New Development Bank is aggressively promoting the Chinese yuan as the primary funding currency for the Global South, marking a significant escalation in the bloc's de-dollarization strategy. With China's deep onshore bond liquidity and the yuan's stability against the dollar, the NDB is positioned to issue low-cost loans in the currency, potentially saving borrowing nations millions in forex costs. President Xi Jinping's long-term campaign to institutionalize the yuan within the bank has reached a critical inflection point, a move analysts predict will further cement the currency's role in international finance and challenge USD hegemony.

BRICS: Chinese Yuan To Be Used to Fund the Global South via New Development Bank

The borrowing costs in the Chinese yuan are low, said Zhongxia Jin, the BRICS-led New Development Bank’s Director General for Treasury and Portfolio Management. He added that the Chinese bond marketThe cost-cutting currency will benefit emerging economies and also power up their infrastructural projects and lending capacity.

Zhongxia said, affirming that the yuan is the best solution for the BRICS-led New Development Bank.he said.

The BRICS New Development Bank switched from lending in the US dollar to the Chinese yuan in 2022. The Indian rupee, the Russian ruble, and the South African rand are also being used for infrastructural loan disbursement. The loans are mostly for the Global South, Latin America, and several countries from the African continent.