Kenya in talks with IMF for a standby facility before 3rd Eurobond issue

The Central Bank Governor Dr. Patrick Njoroge has said Kenya is in talks with the IMF for a standby facility as the country prepares to issue its third Eurobond worth Sh 200 Billion ($2 Bn). It follows the expiry of a similar arrangement with the international lender in September 2018.

Kenya has been relying on the IMF to cushion the country against major events that would hurt the economy. In September 2018, Kenya’s precautionary loan with the IMF expired after the country failed to meet certain conditions set by the lending institution. One of the recommendations was an amendment to the lending cap law which legislators failed to comply with.

The Washington based organization expressed support for the High Court’s ruling in March that annulled the law on lending rate cap. In a March report focused on Kenya, IMF said, “The court ruling against the rate cap, despite retaining the measure for a temporary period, will boost confidence in the financial sector and the regulatory environment, to the benefit of the wider economy.” The international financial body said that the ruling “improves Kenya’s prospect of securing another standby arrangement…” However, the organization will wait for the reforms to be implemented before signing the agreement.

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