Foreign media: Kenya is planning to change the currency for repaying its debt to China from the US dollar to the Chinese yuan, seen as a "win-win" for Sino-Kenyan cooperation. This move will not only help Kenya reduce interest costs and ease pressure on foreign exchange reserves, but also align with China's strategic goal of promoting the internationalization of the yuan.
According to the Kenyan Ministry of Finance, negotiations with the China Exim Bank have entered a deep phase. If an agreement is reached, the US dollar debt used for building the Standard Gauge Railway (SGR) will be converted into yuan debt. The SGR is 480 kilometers long, connecting Mombasa Port and the capital Nairobi, and extending 120 kilometers to Naivasha. The total loan amount is about $5 billion (35 billion yuan), signed in 2014 and 2015.
The current US dollar loan interest rate is about 6.37%, while the expected yuan loan interest rate is about 3%, almost halved, due to the difference between the US dollar overnight financing rate (4.6%) and the yuan interest rate. Analysts believe that this arrangement could set a precedent for future debt restructuring in Africa and other countries, and weaken dependence on the US dollar.
Original: www.toutiao.com/article/1842414152888328/
Statement: This article represents the views of the author himself.