WASHINGTON: The International Monetary Fund’s Executive Board approved a SDR 352.82 million (about US$497.1 million) Stand-By Arrangement and a SDR 135.7 million (about US$191.2 million) arrangement under the Stand-By Credit Facility (SBA/SCF) for Kenya for a combined SDR 488.52 million.
Its decision makes available a total of SDR 379.96 million immediately (about US$535.3 million), and the remainder in two equal tranches upon completion of semi-annual program reviews. The authorities plan to treat the arrangements as precautionary, and do not intend to draw on the SBA/SCF unless external shocks lead to an actual balance-of-payment need.
The one-year arrangements would provide a policy anchor for continued macroeconomic and institutional reforms, and help to mitigate the impact of potential exogenous shocks while these reforms are being pursued, thereby supporting continued strong growth and durable poverty reduction.
Naoyuki Shinohara, Deputy Managing Director and Acting Chair, said, “The Kenyan authorities’ prudent macroeconomic policies and major institutional and economic reforms of recent years have contributed to macroeconomic stability, higher growth, and increased external buffers. Nonetheless, the economy remains vulnerable to shocks arising from Kenya’s growing integration into global markets, security concerns, and extreme weather events. In this context, the new arrangements with the Fund provide a policy anchor for continued reforms, and would mitigate the impact of shocks if they materialize, supporting continued strong growth and poverty reduction.”
