Kenya will consider adopting the Chinese yuan as a reserve currency - here’s why

Kenya is among a number of African countries contemplating including the renminbi as part of their foreign exchange reserves.

According to the governor, Kenya is among a number of African countries contemplating including the renminbi as part of their foreign exchange reserves.

He noted that China's growing role in the global economy has made the Chinese yuan one of the currencies of foreign trade.

"It is inevitable that Kenya will include the Chinese yuan as a reserve currency. The only question is when and the timing will be determined by a number of short term factors," Njoroge said during the Guangzhou-Foshan Nairobi Business Forum.

Bilateral lender

Njoroge also stated that bilateral trade between the two countries has grown exponentially over the past decade. China's debt to Kenya stood at Sh478.6 billion as of May this year, stretching its lead as the country's top bilateral lender.

Recently, central banks from Eastern and Southern Africa met in Harare to discuss the possibility of using the Yuan as a reserve currency.

“Most countries in the Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI) region have loans or grants from China and it would only make economic sense to repay in renminbi (Chinese Yuan),” said MEFMI spokesperson Gladys Siwela-Jadagu.

The International Monetary Fund (IMF) in 2016 included the renminbi to its Special Drawing Right (SDR) basket together with the US dollar, the British pound, the Euro, and the Yen.

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