In March 2016, the Administrative Board of the IMF approved in Kenya a $ 1.5 billion program. (Credit: Reuters) The IMF has released the loss of access from Nairobi to an extra loan of $ 1.5 billion after finding a breach of the minimum bar deficit conditioning access to the loan facility. Taken in June, the freezing order was kept secret by the Kenyan Central Bank before it was disclosed by the IMF.
Kenya was stripped of access to an extra loan of $ 1.5 billion International Monetary Fund (IMF). A decision last June, but the Kenyan Central Bank still refuses to confirm.
Information obscured for 8 months
Until this release of the IMF, the Monetary Policy Committee of the Central Bank of Kenya had, at its last four meetings, refers to the availability of easy subject. The Central Bank has so far still not responded to the recent release of the IMF representative.
A new loan negotiation?
The facility in question includes an arrangement of 990 million repayable with interest over a period of five years and interest-free credit of 495 million repayable over eight years. Approved by the IMF in March 2016, these funds were intended to allow the Kenyan economy to cope with the “exogenous shocks” that could lead to a crisis in the balance of payments.
The maintenance of this facility is conditioned by maintaining the budget deficit at 3.7% of GDP during the 2018-2019 financial year, so as to reduce the risk of debt distress while keeping a reserve for expenditure priorities. The deficit is expected to reach 7.2% in the fiscal year that ends June 30, and 6% between 2018 and 2019, according to the Kenyan Treasury. The level of the budget deficit has prompted the Kenyan authorities to request a new program replaces the current IMF expires in March.
In addition, controls interest rates make it harder for the effective management of monetary policy, “said the IMF representative in the press.
The delegation of the institution has also expressed satisfaction with the state of Kenya’s foreign reserve would be “comfortable and adequate to meet the potential short-term impact.” Kenyan reserves amounted to 7.18 billion dollars in February, or 4.8 months of imports, according to the Central Bank.