The Central Bank of Kyrgyzstan Includes Chinese Yuan in Daily Foreign Exchange Updates
Chinese yuan will be added to the list of foreign currencies with exchange rates published daily by the National Bank of Kyrgyz Republic, expanding China’s influence in Central Asia to compete with Russia.
The announcement from the nation’s central bank states that the exchange rate of the Chinese Renminbi Yuan (RMB) against the Kyrgyz Som will be determined and published starting from Sept. 1. Currently, only the euro, Kazakhstani tenge, Russian ruble, and U.S. dollar exchange rates are published daily, while others are weekly. The decision to include the Chinese yuan in daily rates is seen as a step to enhance economic ties with China and facilitate more trade by introducing more Chinese yuan into the official circulation in Kyrgyzstan.
With China being Kyrgyzstan’s biggest trading partner, the move is expected to stabilize Kyrgyzstan’s financial system due to increased Chinese investment. The trade volume with China is also significantly higher than that with the Moscow-dominated Eurasian Economic Union. China’s economic strength has surpassed Russia’s, and the use of the Chinese yuan by Kyrgyzstan is seen as a way to enhance economic ties and China’s influence in the region.
Expanding Influence in Central Asia
Experts believe that by including the Chinese yuan in its list of commonly-used foreign currencies, Kyrgyzstan can rely on its own currency and the Chinese yuan for trade and financial activities. This move will help China dominate trade and financial transactions in Kyrgyzstan and potentially influence other Central Asian countries. China’s economic influence has outpaced Russia’s in the region, and the use of the Chinese yuan will further solidify China’s role in the Central Asian economy.
Advancing Belt and Road Initiative
As part of the Belt and Road Initiative (BRI), Kyrgyzstan is strategically positioned to advance China’s economic goals in the region. The BRI aims to recreate ancient trade routes to increase China’s trade with countries in Asia, Europe, and Africa. By investing in high-cost infrastructure projects in participating countries, China aims to exert its political influence over these nations. Kyrgyzstan has also signed agreements with China for large infrastructure projects, such as the China-Kyrgyzstan-Uzbekistan railway, further enhancing China’s economic influence in Central Asia.
Striking a Balance with Russia
While Kyrgyzstan relies on Russia for security, its economic ties with China are growing stronger. The rise of China’s economy poses a challenge to Russia’s traditional influence in the region. Kyrgyzstan must navigate the competition between China and Russia, making diplomatic adjustments to maximize its benefits. By maintaining a balance between the two countries, Kyrgyzstan aims to ensure regional stability and security without aligning too closely with either China or Russia.
Overall, Kyrgyzstan remains open to global business opportunities, as evidenced by its inclusion of the Chinese yuan in daily exchange rates alongside other major foreign currencies.
Luo Ya contributed to this report.
