Kenya has reduced its debt servicing costs to China by Ksh21.5 billion without new borrowing, by converting a portion of its Standard Gauge Railway (SGR) loans from U.S. dollars to the Chinese yuan. This strategic move highlights Kenya's efforts to manage its rising public debt and reduce exposure to currency volatility.

• The currency conversion deal led to Kenya paying Ksh37.5 billion for a semi-annual loan installment due in January 2026, a sharp decline from the Ksh59 billion paid during the same period last year.
• The agreement involved converting three dollar-denominated loans, valued at approximately Ksh647 billion, into Chinese yuan, with some repayment periods extended to 15 years, including a four-year grace period.
• Interest rates on the new yuan-denominated loans now stand as low as 3 percent, according to Treasury officials, significantly reducing costs and mitigating exposure to dollar volatility.