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Kenya Asks IMF for a 6-months Extension of $1.5 Billion Standby Credit

Kenya has asked the International Monetary Fund (IMF) to extend its $1.5 billion standby credit facility that is expiring this month for a further six months, the IMF said on Wednesday.

The IMF said last month that Kenya had lost access to the funds meant to cushion it against unforeseen external shocks last June because of a failure to complete a review of the programme.

 In a statement issued at the end of a mission to Nairobi, the IMF said the new request for an extension will be put to the board before the facility expires on March 13.

The Washington-based IMF said the government had committed to reduce the fiscal deficit and substantially modify interest controls, imposed on banks in 2016, which have been partly blamed for choking private sector credit growth.

“Discussions on the details of these policies will continue in the coming weeks,” the IMF said in a statement, adding a full review of the two-year programme was expected to be completed in September.

It said Kenya’s economic growth was expected to rise to 5.5 percent this year, after elections and drought depressed output to an estimated 4.8 percent last year.

“Annual growth could rise further to 6.5 percent within a couple of years, provided that the authorities continue economic reforms, including reducing the fiscal deficit and amending interest rate controls,” the IMF said.