Kenya has completed converting a $5 billion railway loan from China from dollars to yuan, saving approximately $215 million in annual interest payments.
Finance Minister John Mbadi announced that the conversion will immediately take effect, providing relief to the country’s fiscal space.
The move aims to mitigate the risks associated with Kenya’s dollar-denominated debt, which has been exacerbated by the depreciating Kenyan shilling.
By switching to yuan, Kenya hopes to reduce its exposure to currency and interest rate risks.
The loan was used to finance the construction of the Standard Gauge Railway, a project that has been a significant burden on the country’s finances.
