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IMF extends Kenya's credit facility

IMF extends Kenya's credit facility


Kenya’s $680 million existing credit with the International Monetary Fund (IMF) has been extended to March.

IMF Resident Representative in Kenya Armando Morales said both sides would work on a new facility with similar features.

The country secured the year-long, insurance-type loan in February last year to help it deal with any unforeseen shocks that could threaten economic stability.

Morales reiterated that they are now working on extending the credit for a few weeks.

“We are in dialogue with the government to present a new programme to our board before the end of this quarter. We agreed with the authorities that it was prudent to maintain the insurance during the discussion for the new programme.”

The Central Bank of Kenya (CBK) calmed the tension in the markets last year after increasing its benchmark lending rate by 3 percent and increasing foreign reserves without turning to the IMF for standby loan.

Kenya’s currency, Shilling, weakened by 11 percent last year against the Dollar but has been steady this year.

Morales said with the latest development, Kenya’s government has the necessary tools to maintain stability in the country’s economy.

The IMF expects Kenya’s economy to grow by 6 percent this year, from an estimated 5.6 percent last year.

Unlike some other African nations, Kenyan is not reliant on commodity exports to Asia.

Finance Minister, Henry Rotich last week said Kenya was looking to cut spending and would keep engaging international investors.