Kenyan banks move to trade Chinese yuan to boost revenues

NAIROBI - Kenyan banks were increasingly moving to trade the Chinese Yuan against the Kenyan shilling in order to boost their revenues, the Kenya Bankers Association (KBA) said on Friday.

The KBA CEO Habil Olaka told Xinhua in Nairobi that the growing commercial links between Kenya and China had led to huge demand for Chinese yuan or Renminbi in Kenya.

"We have been seeing more and more banks opening up Chinese yuan trading desks in order to improve their customer experiences as well as enhance revenues," Olaka said.

He noted that China's rapid economic expansion over the past three decades had seen the Chinese currency grow in prominence in global trade.

In 2016, the International Monetary Fund (IMF) included the Chinese yuan into its Special Drawing Rights Baskets alongside the US dollar, British Pound, Yen and Euro.

The CEO said that as Sino-Kenyan ties grew, the renminbi was emerging as the underlying currency for bilateral trade.

"This will eliminate the need for traders to convert Kenya shillings into US dollar and then the Chinese Yuan," he added.

According to KBA, the greater convertibility of the Chinese currency will reduce the cost of trade between the two nations as it will eliminate the need to use intermediary currencies for trade.

Olaka noted more banks were also rolling out products to cater for the growing Chinese business community in Kenya.

"The Chinese investors are a lucrative niche market for the financial sector due to their significant role in economy," he added.