NAIROBI – Kenya’s umbrella body of the banking industry on Monday said that greater convertibility of the Chinese currency, yuan, will boost the East African nation’s economic growth.
Kenya Bankers Association (KBA) CEO Habil Olaka told Xinhua in Nairobi that the renminbi has gained importance because of the significance of China in the global trade.
“Kenya’s economy is now benefiting as more and more banks are now offering Chinese yuan,” Olaka said during a workshop on new International Financial Reporting Standards 9 (IFRS 9) regulations.
Kenyan banks are set to begin implementing the IFRS 9 beginning in January.
Olaka noted that more and more banks are embracing the Chinese yuan as Sino-Kenya trade increases.
“The influence of the Chinese is being felt globally and therefore it would not be prudent to ignore the yuan,” Olaka said.
In 2016, the International Monetary Fund (IMF) added the Chinese yuan into its basket of reserve currencies.
“We are encouraging our members to adopt the use of yuan in order to ease trade with our biggest trading partner,” Olaka said.
He said at least 10 out of Kenya’s 42 banks have the Chinese yuan available over the counter.
According to KBA, banks facilitate trade and have therefore embraced the Chinese currency in order to bring convenience to their customers.
Olaka noted that before the availability of the yuan in Kenya, traders were required to convert the Kenyan shilling to U.S. dollars and then to yuan.
“This increased the cost of trading between Kenya and China and so banks with Chinese yuan counters have helped to promote Sino-Kenya trade,” he said.