Connect with us

Hi, what are you looking for?

Capital Business
Capital Business
The National Treasury forecasts fiscal deficit will decline to 4.1percent of Gross Domestic Product (GDP) by fiscal year 2018/2019 from 8.9percent in fiscal year 2014/2015/FILE

Kenya

IMF approves Sh152bn precautionary loan for Kenya

The National Treasury forecasts fiscal deficit will decline to 4.1percent of Gross Domestic Product (GDP) by fiscal year 2018/2019 from 8.9percent in fiscal year 2014/2015/FILE

The National Treasury forecasts fiscal deficit will decline to 4.1percent of Gross Domestic Product (GDP) by fiscal year 2018/2019 from 8.9percent in fiscal year 2014/2015/FILE

NAIROBI, Kenya, Mar 15 – The International Monetary Fund (IMF) has approved Kenya’s application for a total of Sh152.3billion ($1.5billion) in a precautionary credit facility.

Precautionary arrangements are used when countries do not intend to draw on approved amounts, but retain the option to do so should they need it.

IMF Deputy Managing Director and Acting Chair Min Zhu says the decision by the IMF executive board follows Kenya’s commitment to only use the credit facility in the event of exogenous shocks with a negative impact on balance of payments.

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

In this context, he says, the new precautionary arrangements would provide a policy anchor for continued macroeconomic and institutional reform, and would help mitigate the impact of potential exogenous shocks if they were to materialise.

IMF has also noted that the Central Bank of Kenya expressed commitment to gradually reduce inflation to the mid-point of its target range (5 to 2.5 percent).

“The authorities are taking actions to preserve financial stability. These include steps to strengthen micro and macro prudential stress testing and the capital adequacy assessment framework, and develop a legal and operational crisis management system,” the IMF boss said.

Continued improvement in the quality of macroeconomic statistics and strengthening the business climate will be key to promoting transparency and evidence-based policy making, and supporting inclusive growth.

The National Treasury forecasts fiscal deficit will decline to 4.1percent of Gross Domestic Product (GDP) by fiscal year 2018/2019 from 8.9percent in fiscal year 2014/2015.

Advertisement. Scroll to continue reading.
Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...