More loans for Kenya as loan limit is increased
Kenya’s liquidity crunch has been boosted by the International Monetary Fund’s (IMF) decision to increase its lending programme by ninety eight billion shillings.
This was announced on Tuesday by President William Ruto’s chief economic adviser according to Reuters.
Ndii welcomed the move noting that it was timely considering that Kenya had a Eurobond maturing on June next year worth three hundred billion shillings.
Ndii further stated that the IMF move can augment our programme as at the moment up to $650 million equivalent to 98 billion shillings that they have agreed to do.
The economist noted that this was agreed following a visit to the country by an IMF team last week.
During the visit, the IMF team conducted the sixth review of the programme.
While the IMF is yet to issue an official statement on the outcome of the review, Ndii revealed that it had been successful.
The news came hours after Ndii complained that former President Uhuru Kenyatta had thrown the country into a liquidity crunch by cancelling one hundred and sixteen billion shillings Eurobond a few days to last year’s general election.
To rectify the blunder, Ndii revealed that Kenya had been forced to borrow more through syndicated bank loans, a situation that has increased Kenya’s public debt past the Ksh10 trillion mark.
More loans for Kenya as loan limit is increased
In July, following a successful fifth review, IMF gave an advance of one hundred and forty six billion shillings to Kenya.
At the time, the IMF announced that 56 billion shillings would be used to shore up the country’s economy and boost its foreign exchange reserves while the rest of the cash would be used for building resilience against climate change.
Haimanot Teferra, the IMF Mission Chief for Kenya, explained that the decision to advance the Ksh146 billion was arrived after Ruto’s administration showed it had a viable repayment formula.
The IMF team stated that Kenya was able to provide them with contingency plans on how the loan would be repaid.
