President William Ruto has revealed that he pushing for India to extend a Ksh38 billion loan to Kenya in Indian Rupees rather than in dollars.
Speaking during an interview with India's TV station, Firstpoint, the head of state noted that getting the loan facility in India's local currency would be beneficial for both countries.
As part of the dedollarisation campaign, Ruto noted that both countries could trade in the Shilling and Rupees instead of relying on the dollar. He asserted that the two countries were major trade partners.
The President expounded the reasoning behind his push adding that both stand to incur forex loses if they complete the transaction in US dollars.
"We lose Ksh766 billion (USD5 billion) every year just in exchange rates. That is why we are saying that we want trade to be currency-neutral.
"The conversation I was having with Prime Minister Narendra Modi is that even in the USD250 million facility that will be extended to Kenya, we want it in Indian Rupees. Why should we look for the dollar, yet we have the Indian rupees?" he posed.
On the other hand, he maintained that he had no problem with the dollar insisting that he is advocating balanced trade arrangement that would be beneficial to the continent and other countries in the global south
"We have no problem with the dollar but we want currency-neutral trade. We want to diversify currency.
"For example, for us in Africa, the African Export-Import Bank (Afreximbank) has a pan-African payment settlement system where trade in Africa will be in local currency but the settlement can be done at a higher level by a centralised system," he added.
The move by Ruto to get the loan in rupees could be beneficial to the country which has been battered by depreciation of the Kenyan Shilling.
As the Shilling continues to shed against the dollar, Kenya's stock of public debt has surpassed the Ksh10 trillion mark over the last year owing to the rise in interest fees as the loans were mostly issued in dollars.
For instance, if a dollar loan was exchanged at Ksh123.52 in January 2023, the same dollar would be valued at Ksh153.35 in December.
