IMF, Kenya agree on precautionary loan deal
14 November 2014, 10:38
Washington - Kenya and the International Monetary Fund agreed on a stand-by loan deal to support the country's economic reforms and give it a cushion against outside shocks, the IMF said on Thursday.
The fund added that Kenya plans to treat the loan, which would total $700 million to $750 million, as precautionary. The deal must still be approved by the IMF's board, which should meet on the issue in late January.
East Africa's biggest economy had first asked for such a facility at the beginning of 2014 to protect it against unforeseen shocks, such as weather-related problems for the farming industry.
"This arrangement would serve an insurance purpose, providing Kenya with access to IMF resources in the event of exogenous shocks," the IMF said in a statement.
Also read: IMF chief to visit Kenya
The fund said the stand-by loan could help Kenya pursue initiatives such as a multibillion-dollar standard gauge railway, while keeping its debt sustainable.
The railway should help boost Kenya's economic growth to 6.9 percent next year, compared to 5.3 percent in 2014.
For the latest on national news, politics, sport, entertainment and more follow us on Twitter and like our Facebook page!