Kenya has converted its $5 billion railway loan from China from U.S. dollars to Chinese yuan in a move aimed at reducing interest expenses, Finance Minister John Mbadi announced on Tuesday.
Mbadi said the currency conversion will lower the higher dollar-denominated interest rates to more favourable yuan-based rates, saving the government an estimated $215 million annually.
“It kicks off immediately and creates savings in our fiscal space,” Mbadi told reporters.
Beyond easing financial pressure, officials said the shift to yuan also helps mitigate Kenya’s exposure to foreign exchange risks, as much of the country’s external debt is currently denominated in U.S. dollars. The decision, they added, is part of a broader strategy to diversify Kenya’s debt portfolio and stabilise repayment costs amid global currency fluctuations.
Source:Africa Publicity
