IMF Support Shields Forex, relieving 2024 Eurobond Stress

During the week, the International Monetary Fund (IMF) team and Kenyan authorities reached a staff-level agreement on;

• Kenya’s sixth review of the 48-month Extended Fund Facility (EFF) and Extended Credit Facility (ECF) arrangement,
• An augmentation of access under the EFF/ECF totaling USD 938m (KES 142.79b), and,
• The first Review under the Resilience Sustainability Facility (RSF), following its approval in July 2023.

Upon approval (expected in January 2024), Kenya will have immediate access to about USD 682.3m including from the augmentation of access and the first review of RSF.

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The disbursement will bring the total IMF financial support under these arrangements to USD 2.75bn.

See below the sequence of financing the government has received under the arrangements;

Persistent support from the IMF is anticipated to bolster investor confidence in Kenya’s economic policies and financial stability.

This heightened confidence is expected to draw in supplementary investments and financial assistance from diverse sources, thereby fortifying the nation’s capacity to fulfill its debt obligations.

Moreover, the IMF’s endorsement is foreseen to streamline Kenya’s access to international financial markets, potentially facilitating the procurement of additional financing and consequently less pressure on the 2024 Eurobond repayment.

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