For many developing countries, renminbi-denominated loans offer a credible, increasingly accessible, and cost-effective alternative to borrowing in dollars. Now that the stability and predictability of US economic policies and institutions are in question, the Chinese currency is becoming more attractive.
BEIJING/BOSTON—The global development-finance gap remains large, and developing countries need more options. According to UN Trade and Development, developing countries face an annual shortfall of $4 trillion in achieving the Sustainable Development Goals. Yet for much of the postwar era, development finance has been predominantly denominated in US dollars, leaving them exposed to changes in borrowing costs and debt burdens driven by US monetary policy and investor appetite in advanced economies.
