The amount of foreign currency in Kenyan banks has risen considerably as institutions diversify their reserves by embracing the Chinese yuan.
The East African nation's banks foreign currency deposits rose from 5.14 billion U.S. dollars in May to 5.74 billion dollars in June.
The foreign reserves have been on an upward trend in the second quarter where they crossed the 5 billion dollars mark in May. In April, the reserves stood at 4.7 billion dollars.
Initially, Kenyan banks kept their foreign reserves mainly in dollars, British pound and euro.
However, increased bilateral ties between Kenya and China has seen a number of the 42 commercial banks in the East African nation adopt the yuan, which analysts cite as part of the reason for the surge in foreign deposits.
Recently, the Kenyan Bankers Association asked members to raise their stock of the Chinese currency to cater for the increased China-Kenya trade.
The chief executive of Kenyan Bankers Association Habil Olaka said the yuan has become important in settling financial transactions, prompting Kenyan banks to set up China-dedicated desks and increase stock.
(Xinhua News Agency September 5, 2018)