NAIROBI– The International Monetary Fund (IMF) has approved Kenya’s request to extend its standby credit facility for the country by six months.
However, the Central Bank of Kenya cannot access the cash until the IMF reviews measures taken by the government to reduce its fiscal deficit and amend the interest rates law.
The 150 billion shillings (about 1,48 billion US dollars) standby credit facility was to expire on March 31. Three years ago, the IMF agreed to set up a credit line to Kenya worth 150 billion shillings to access in case of a balance of payment crisis.
Although Kenya has never tapped the facility, it was seen as a sign of confidence in Kenya from the global lender.
In order to access the standby fund, the National Treasury has to progressively lower the budget deficit to below 6.0 per cent in the mid-term, continue with economic reforms and review the banking amendment law that caps the rates at which commercial banks charge for loans and pay for deposits which became law in October 2016.
However, the government is yet to slash the deficit which currently stands at 7.2 per cent. Last week, the National Treasury committed to accelerate reforms and urged the IMF review mission that was in Nairobi to extend the credit line for six months.
A statement from the IMF says its executive board has accepted Kenya’s request, extending the standby credit facility up to September this year.
Source: NAM NEWS NETWORK