Chinese currency gains popularity amid rising trade ties with Kenya: official
NAIROBI, Aug. 2 (Xinhua) -- The Kenya Bankers Association (KBA) said Wednesday that the Chinese currency renminbi, or the yuan, is gaining popularity among commercial lenders due to the rising Sino-Kenyan trade ties.
Habil Olaka, the chief executive officer of KBA, told Xinhua in Nairobi, the capital of Kenya, that the yuan is emerging as an alternative currency to the U.S. dollar in settling financial transactions involving trade between Kenya and China.
"What tends to happen between two countries trading, is that they use a currency that is readily available in their countries," Olaka said on the sidelines of the launch of the 2022 Kenyan Banking Sector Total Tax Contribution study by KBA.
According to the state-owned Kenya National Bureau of Statistics, the country's total exports to China reached 27.5 billion shillings (about 193 million dollars) while imports from China hit 3.17 billion dollars in 2022. Government data indicated that China has become the largest trading partner, foreign investor and project contractor of Kenya.
Olaka added that most commercial banks currently have a yuan trading facility that makes the Chinese currency locally available. He observed that the use of the appropriate currency is a critical factor in boosting bilateral trade, noting that Kenyan banks are embracing the use of the yuan in Sino-Kenyan trade because it reduces the transaction cost by eliminating the need for converting currencies into the U.S. dollar.
He revealed that the majority of banks operating in Kenya have also opened Chinese desks in order to serve the growing Chinese business community in the East African country.