Government gets $1.5 billion IMF standby loan

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March 15, 2016 12:45 PM

The world body said the facilities could be drawn on if the East African nation faces unforeseen shocks.

A currency dealer counts Kenya shillings at a money exchange counter in Nairobi

The International Monetary Fund (IMF), in s statement issued late Monday, said it has approved a two-year standby facility for Kenya worth about $1.5 billion.

“The Kenyan authorities have indicated that they will continue to treat both arrangements as precautionary,” the IMF said after the completion of discussions with Kenya on replacing existing facilities.

Media reports reveal that the funds comprise a standby arrangement worth about $990 million and a standby credit facility worth about $495 million.

The Central Bank of Kenya calmed shakiness in the markets in 2015 after hiking its benchmark lending rate by 3 percentage points to 11.50 per cent, according to News Nigeria Online report.

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The Kenyan apex bank also increased foreign reserves without turning to the IMF standby loan. So far in 2016, the shilling has been firm, appreciating by about 0.6 per cent against the U.S. dollar.

“Kenya’s recent growth performance remains robust and the outlook is positive. Despite positive policy steps undertaken under the current Fund-supported programme, the economy remains vulnerable to shocks, reflecting less favorable global financial market conditions, as well as continued security threats and potential extreme weather events,” IMF Deputy Managing Director, Min Zhu said.

At the end of 2015, Kenya's estimated growth for 2015 stood between 5.8 to 6.0 percent, which was lower than originally expected but still higher than the 2014 figure of 5.3 per cent

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