The International Monetary Fund (IMF) is set to convene on Wednesday to conclude the sixth review of its arrangement with Kenya, with a key agenda item being the decision on disbursing additional funds to the country.
Acknowledging the resilience of Kenya’s economy, the IMF has expressed concerns regarding uncertainties surrounding the nation’s ability to meet the bullet payment, deeming it a potential downside risk.
A delegation from the IMF, headed by Haimanot Teferra, conducted discussions in Nairobi from October 30 to November 15 of the previous year regarding the pending reviews. Teferra stated, “Despite continued commitment to the implementation of the IMF-supported economic program, uncertainty hangs over Kenya’s effective access to international bond markets.”
The IMF is anticipated to transfer KES 109 billion, encompassing the expansion of resources under the Extended Fund Facility (ECF) and Extended Credit Facility (ECF), along with the first review of the Resilience Sustainability Facility (RSF). The approval of these additional funds would bring the total financial support disbursed by the IMF under the arrangements to Sh427 billion ($2.68 billion).
The injection of fresh resources from the IMF holds significant importance for Kenya as it strives to successfully navigate the maturity of its inaugural Eurobond in June, especially given challenges in accessing the international capital markets.
The proceeds generated from the disbursement will play a crucial role in strengthening Kenya’s foreign exchange reserves, providing the government with the means to meet the maturation of the KES 319 billion ($2 billion) Eurobond due in June.
