Kenya to Receive Ksh 34.5 bn Loan from IMF for Covid-19 Response

Kenya will receive emergency aid totalling USD 410 million to support its program to address debt vulnerabilities, the International Monetary Fund (IMF) said on Wednesday.

Kenya is set to tap into the International Monetary Fund (IMF) financing programme to support its COVID-19 response and budget support.

The Central Bank of Kenya expressed optimism that the Ksh 34.5 billion will be approved by the IMF Board next week with expectations it will be discussed on Friday, April 2.

CBK Governor Patrick Njoroge said the loan represents the first batch of a $2.4 billion 38-month program.

“We expect this will be approved on Friday and the consequential disbursement will follow early next week,” CBK Governor Patrick Njoroge said in a post-Monetary Policy Committee (MPC) to the media on Tuesday.

“The bottom line is that the program will support our COVID-19 response and budget support. It anchors fiscal consolidation through revenue-driven policies which minimize debt vulnerabilities. This is the key element of the program,” added Dr Njoroge.

In February, Kenya and the IMF reached a staff-level agreement on the disbursement of a $2.4 billion loan facility. 

He also disclosed that it will receive further disbursement from the World Bank’s Development Policy Operations (DPO) before the end of the current fiscal year to strengthen the reserve bank’s usable foreign currency deposits.

CBK foreign exchange reserves, currently stand at USD7,348 million equivalent to (4.51 months of import cover) which it says continue to provide adequate cover and a buffer against short-term shocks in the foreign exchange market.

The World Bank’s DPO is estimated at Ksh 82.5 billion by June and an additional Ksh 74.3 billion in the next fiscal year.