By Kanjyik Ghosh
(Reuters) – The International Monetary Fund (IMF) on Wednesday approved a $941 million lending boost to Kenya, with an immediate disbursement of $624.5 million, offering some relief to the East African country as it battles financial pressures.
The disbursement under the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) programs will also be topped by a release of $60.2 million under the Resilience and Sustainability Facility (RSF) arrangement.
The executive board sign-off brings the IMF’s total funding commitment to Kenya under all three facilities to more than $4.4 billion. “Kenya’s growth remained resilient in the face of increasing external and domestic challenges. The EFF/ECF and RSF arrangements continue to support the authorities’ efforts to sustain macroeconomic stability,” the IMF said in a statement on Wednesday. Kenya is grappling with acute liquidity challenges amid uncertainty over its ability to access funding from financial markets before a $2 billion Eurobond matures in June. The government has said that, together with expected funds from the World Bank and regional banks like the African Export-Import Bank and Trade & Development Bank, the IMF funds will help Kenya to pay the looming foreign debt maturity without running down its hard currency reserves. Kenya’s balance of payments and financial positions have also been strained by the legacy of the COVID-19 pandemic and frequent climate change-induced droughts, according to the IMF, while its shilling currency has weakened. The approval of the new IMF money followed a staff-level agreement reached with Kenyan officials in November, with slight differences in dollar values due to currency fluctuations in the IMF Special Drawing Rights unit of account.
(Reporting by Kanjyik Ghosh and David Lawder; Writing by Elias Biryabarema; Editing by Rachel Savage and David Gregoro)