The International Monetary Fund agreed to immediately disburse $684.7 million to Kenya, boosting the country’s foreign-exchange reserves before a critical eurobond repayment due in June.
The money includes $624.5 million from an expanded program agreed with the Washington-based lender last year and $60.2 million from its so-called Resilience and Sustainability Facility, the IMF said in a statement Wednesday following an executive board meeting.
The decision confirms a staff-level recommendation in November to boost the program a second time. The IMF first agreed to bolster its financing package to Kenya by 45% to $3.5 billion in July and extend the duration of the 38-month program by 10 months to April 2025.
The arrangements will “support the authorities’ efforts to sustain macroeconomic stability, strengthen policy frameworks and withstand external shocks, the IMF said. They will also help push forward key reforms, such as front‑loaded fiscal consolidation efforts to mitigate debt vulnerabilities and a new debt anchor by 2029 and support more inclusive and green growth, the fund said.
Kenya’s maturities in external debt in the 12-months through June are estimated at $3.5 billion, up from $1.6 billion the prior year.
The money will also help the government shore up its foreign-exchange reserves ahead of the $2 billion eurobond repayment in June, while supporting the shilling — Africa’s second worst-performing currency this year, according to data tracked by Bloomberg.
The 2024 bond has been a focal point for investors worrying about the nation’s debt burden as it faces elevated energy and food import bills, with limited foreign exchange to fund the shortfalls. The country had $6.8 billion of foreign-exchange reserves as of Jan. 11.
The country is also seeking to boost its public finances with a kind of debt swap.
Developing nations have been struggling to refinance their eurobonds due to being locked out of markets by high-interest rates.