Kenya has secured a new credit facility from the International Monetary Fund (IMF) to the tune of $1.5 billion usable in the next 24 months as a precaution against shocks.
However, Kenya does not have to draw the forex cash unless a real shock materialises into a balance of payment problem. That means only a major shock to the value of the local currency would prompt Kenya to draw it.
“The Kenyan authorities have indicated that they will continue to treat [the] arrangements as precautionary, and do not intend to draw on the new arrangements unless exogenous shocks lead to an actual balance of payments need,” said the IMF in a statement.
The board of the IMF immediately made $990 million available for drawing.
There will be a possible new approval for drawing after every six months when the Bretton Woods institutions does a review of the extent to which Kenya has adhered to the programme of reforms.