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Why Kenya is keen on Yuan for SGR loan payment
The interest on dollar-denominated SGR loan is currently based on Secured Overnight Financing Rate (SOFR) — the global benchmark, which fluctuates based on prevailing economic fundamentals such as inflation, liquidity, and interest targets by the Federal Reserve.
Kenya and China are in advanced talks to swap the dollar-denominated standard gauge railway (SGR) debt to Chinese Yuan in a bid to ease mounting interest repayment obligations.
The National Treasury believes switching to the Chinese Yuan will result in “huge” savings for taxpayers who service the loan in two installments every year.
