The International Monetary Fund (IMF) may loan Kenya 40 billion shillings to shore up its foreign exchange reserves, which are below the statutory minimum level, a local daily reported.
The Central Bank of Kenya said negotiations were ongoing but that the details as reported were what east Africa’s largest economy was working towards.
The Daily Nation cited the IMF’s mission chief for Africa, Domenico Fanizza, as saying the money would be disbursed over the next three years and repaid over 10 years, Reuters reports.
“They are coming to negotiate a program that will provide balance of payments support for the next three years,” central bank Governor Njuguna Ndung’u told Reuters.
Kenya’s balance of payments recorded a US$665 million surplus in the year to July, latest official data showed.
Foreign exchange reserves have been stuck for months at 3.5 months of import cover, below the statutory requirement of 4 months.
At the end of last week, central bank held official usable reserves of US$3.492 billion, enough to cover imports for 3.471 months.
The Central Bank of Kenya has been buying foreign exchange from the market regularly this year to bolster its reserves, it says.
The IMF was not immediately available to confirm the report.