IMF Executive Board Approves New Arrangements for Kenya Totaling US$1.5 billion

Stocks and Financial Services Press Releases Tuesday March 15, 2016 09:17
IMF--15 Mar--International Monetary Fund

The Executive Board of the International Monetary Fund (IMF) today approved a new SDR 709.259 million (about US$989.8 million) 24-month Stand-By Arrangement (SBA) and a SDR 354.629 million (about US$494.9 million) 24-month Standby Credit Facility (SCF) for Kenya, for a combined SDR 1.06 billion (about US$1.5 billion, or 196 percent of Kenya's quota).

The Executive Board also completed the second and final reviews under the previous SBA and SCF for Kenya. The SBA and SCF, initially for 12 months, with a combined total access of SDR 488.52 million (about US$688 million), were approved by the IMF's Executive Board on February 2, 2015 (see Press Release No. 15/29), and extended until March 15, 2016 on January 27, 2016.

The Kenyan authorities have indicated that they will continue to treat both arrangements as precautionary, and do not intend to draw on the new SBA and SCF arrangements unless exogenous shocks lead to an actual balance of payments need. Today's decision would make available SDR 542.8 million (about US$757.5 million), and the remainder in four tranches upon completion of semi-annual program reviews.

Following the Executive Board discussion on Kenya, Mr. Min Zhu, Deputy Managing Director and Acting Chair, said:

"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 favorable global financial market conditions, as well as continued security threats and potential extreme weather events. In this context, 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 materialize.

"The envisaged reduction of the fiscal deficit by 3 percent of GDP over the next two years through a well-balanced policy mix would maintain space for high-priority infrastructure investments and greater provision of health and education services in a sustainable manner. Continued public financial management reforms—aimed at upgrading efficiency, transparency and accountability, to complement the envisaged fiscal consolidation—are key to containing risks.

"The Central Bank of Kenya is committed to gradually reducing inflation to the mid-point of its target range (5+/- 2.5 percent). To achieve their inflation objective, the authorities will align the interbank rates with the policy rate and formally announce and implement an interest corridor, thereby strengthening the monetary policy transmission mechanisms in the context of a floating exchange rate regime.

"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.

"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."

Latest Press Release

PDI restructures its businesses turning around into profit with the focus for sustainable growth and confirms its strong financial position with cash for new investment exceeding 2 billion baht

"Sadawut Taechaubol" – as a new leader of PDI announced to move forward to restructure the current businesses with primary focus on sustainable growth, and to sell assets from zinc business including factory land in Rayong. With PDI's financial...

SET granted Sustainability Report Awards 2018 to CPF

The Securities and Exchange Commission of Thailand (SEC), Thai Listed Companies Association and Thaipat Institute jointly granted Sustainability Report Awards 2018 (Excellent Award) to Charoen Pokphand Foods Company Limited (CPF) reflecting the company's...

IMF Executive Board Completes the Third Review under the Extended Credit Facility Arrangement and Approves the Fourth US$34.9 Million Disbursement to Togo

Togo's program aims to reinforce fiscal and financial stability and promote inclusive growth.Program implementation under the ECF arrangement has been satisfactory.On December 10, 2018, the Executive Board of the International Monetary Fund (IMF)...

IMF Staff Concludes Visit to The Bahamas

The Bahamian economy continues to recover, with real GDP growth projected to reach 2.3 percent in 2018 and 2.1 percent in 2019. The Fiscal Responsibility Law (FRL) will support the government's efforts to secure fiscal sustainability and put debt on a...

Control Risks: US China Trade Rift Foretells a New World Order Emerging in 2019

Control Risks, the specialist global risk consultancy says that a US policy of China containment is set to emerge as a pillar of the new world order in 2019. (Photo: https://mma.prnewswire.com/media/795444/RISKMAP_2019_Top_Five_Risks_Infographic.jpg...

Related Topics