2024-01-19 13:40:49
The Trade and Development Bank (TDB) has lent Kenya $210 million, Finance Minister Njuguna Ndung’u told Archyde.com on Friday, ahead of the maturity of a $2 billion Eurobond in June.
Falling hard currency reserves, a sharp weakening of the Kenyan shilling and revenue problems have raised questions about the country’s ability to make the Eurobond payment, although the International Monetary Fund (IMF) said on Thursday that he did not expect Kenya to default.
The loan facility provided by TDB, an African development finance institution serving 25 member states, is part of its mandate to raise $1 billion for Kenya’s liability management, Ms. .Ndung’u.
He said Kenya was supposed to receive funds in installments of $500 million, but the bank had so far released only $210 million from its own balance sheet.
Mr Ndung’u did not specify how the loan would be used. Kenya’s central bank governor said in December that TDB would lend Kenya $300 million to buy back part of the Eurobond.
The IMF board approved a $941 million loan to Kenya on Wednesday, providing some financial relief.
In a letter to the IMF released on Thursday, Mr Ndung’u and the central bank governor said Kenya intended to turn to international bond markets as soon as market conditions permitted.
The price of Kenya’s international dollar bonds increased in response to this news. Most of the country’s international bonds currently yield less than 10%. When yields are above this level, issuing new debt is generally considered too expensive.
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