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IMF Warns Kenya on Yuan Swap Risks Amid Debt Crisis

11/13/2025

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Summary

Story summary

The International Monetary Fund (IMF) has advised Kenya to consider exchange-rate risks after it converted US$3.5 billion of loans from China into yuan, a move aimed at managing debt and expected to save about US$215 million annually.
The IMF cautioned that the currency swap could expose Kenya to risks if the yuan strengthens.
Kenya's debt has surpassed KSh 12 trillion.
A shift toward domestic borrowing reduced dollar-denominated debt from 62% to 52%.
Ethiopia maintains a stable credit position with the IMF, reflecting ongoing economic reforms despite persistent inflation and foreign-exchange shortages.

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Story summary

The International Monetary Fund (IMF) has advised Kenya to consider exchange-rate risks after it converted US$3.5 billion of loans from China into yuan, a move aimed at managing debt and expected to save about US$215 million annually.
The IMF cautioned that the currency swap could expose Kenya to risks if the yuan strengthens.
Kenya's debt has surpassed KSh 12 trillion.
A shift toward domestic borrowing reduced dollar-denominated debt from 62% to 52%.
Ethiopia maintains a stable credit position with the IMF, reflecting ongoing economic reforms despite persistent inflation and foreign-exchange shortages.