Kenya’s request for a standby credit facility from the International Monetary Fund will be decided early next year.
A team from the fund that has just concluded its review mission in Nairobi has given the country hope of securing the request.
Head of the IMF team Benedict Clement has lauded Kenya’s efforts to remove interest rates cap, narrow budget deficit and shoring up of the forex reserves.
The 151 billion shillings standby credit line by the International Monetary Fund expired in October 2018 leaving the country deeply exposed to exogenous financial shocks.
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Since then the National Treasury has been engaging the IMF with the aim of extending the precautionary facility.
Kenya has never tapped the standby credit facility since it was approved by the IMF board in 2014.
The credit line is open to developing economies that face shortage of foreign currencies due to global shocks.
The International Monetary Fund had set various conditions for Kenya to meet before the standby fund was restored.
Key among them was to lower the budget deficit to below 7 percent, repeal section 33B of the banking act that had introduced interest rates caps and tame year-on-year inflation to below 6 percent.
Treasury has so far managed to meet the three conditions, with parliament yielding to the executive to repeal the interest rate cap early this month.
A team from the International Monetary Fund led by head of the Fiscal Policy at the Fiscal Affairs Department Benedict Clement concluded their week long fact finding trip to Nairobi giving the country thumbs up.
Benedict met with various top treasury and central bank officials led by Acting Secretary Ukur Yattani and central bank governor Dr. Patrick Njoroge.
The team lauded efforts by the government to improve its fiscal discipline that has led to the economy expanding by 5.6 percent in the first six months of 2019.
The team is expected to write to the board of IMF, which will decide on the fate of the credit facility early next year.
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