Kenya secures KES 150 billion IMF loan amid economic challenges

Kenya is contending with acute liquidity challenges amidst uncertainty surrounding its ability to secure financial market funding prior to the maturity of a $2 billion (Ksh. 319 billion) Eurobond in June.

The government has indicated that, in conjunction with anticipated funds from the World Bank as well as regional entities such as the African Export-Import Bank and Trade and Development Bank, International Monetary Fund (IMF) resources will assist in meeting the imminent foreign debt maturity without depleting its reserves of hard currency.

The impact of the COVID-19 pandemic and recurrent climate change-induced droughts has strained Kenya’s balance of payments and financial positions, as reported by the IMF. Additionally, the country’s currency, the shilling, has experienced depreciation.

The approval of the new IMF funding comes subsequent to a staff-level agreement reached with Kenyan officials in November. Minor discrepancies in dollar values are attributed to fluctuations in the IMF Special Drawing Rights unit of account.