Kenya’s central bank governor on Wednesday stated that the country had met all targets set by the International Monetary Fund in its review of its bailout programme and was expected to continue working with the IMF until April.
Kenya has agreed to a four-year loan from the International Monetary Fund in 2021 and signed a climate change loan agreement, bringing its total loan from the IMF to $3.6 billion.
However the deadly attack on the tax plan forced the government to abandon its budget bill scheduled for June, further affecting the government’s debt for the fiscal year, with increased payments not being paid and IMF payments being postponed.
“We’ve achieved all that was needed for the reviews to be completed,” Kamau Thugge, the head of the Central Bank of Kenya, said in an interview on the sidelines of the IMF and World Bank annual meetings in Washington. “Obviously after the review, there are still the targets for December.”
The staff agreement for the seventh and eighth joint reviews of country programs is scheduled to be submitted to the IMF executive board for signature on October 30 and is expected to result in expenditures of $611 million.
Asked whether the country would seek another financial package from the International Monetary Fund when the current period ends in April, Thugge said that would be the case but that the size and duration had not yet been decided.
Inflation was set to decline below the 3.6% annual rate recorded in September, he said, adding that the country’s FX reserves currently stood at $8.6 billion, representing 4.3 months’ worth of imports. The central bank had said earlier in October that reserves stood at $8.25 billion.
More interest rate cuts also are on the cards, Thugge said, after policymakers slashed the benchmark lending rate by 75 basis points in October to 12.00%, following a 25-basis-point reduction in August – the first rate cut in approximately four years.
