Kenya has converted its US dollar-denominated railway loans from China into the Chinese yuan, not only securing debt relief but also fitting into Beijing’s long-term goal of internationalising its currency.
Analysts said the decision, announced by Kenya last week, paved the way for other debt-stressed African countries and could ultimately draw them closer to China.
Kenyan Treasury Minister John Mbadi said on Tuesday that the country’s US$5 billion Chinese railway loans had been converted to Chinese yuan, in a move expected to cut annual debt-servicing costs by US$215 million.
Kenya took three loans worth US$5 billion from the Export-Import Bank of China (China Exim Bank) in 2014 and 2015 to build the 600km (373-mile) Standard Gauge…