Kenya: Over $1.2 Billion in Fresh Funding Expected

FILE: Kenya Central Bank Governor Patrick Njoroge speaks during an interview in his office in the capital Nairobi, Dec. 8, 2015.

WASHINGTON - Kenya expects at least $1.2 billion in financing inflows between April and May and is in talks for new funding from the International Monetary Fund (IMF) to support falling foreign exchange reserves, its central bank governor said on Wednesday.

Kenya expects $250 million from syndicated loans this month and a $1 billion budgetary support loan from the World Bank in May, Central Bank Governor Patrick Njoroge told Reuters on the sidelines of the IMF and World Bank Spring Meetings in Washington.

"We are not very worried because we have significant inflows coming in," he added, saying "This compensates for the $1.2 billion we couldn't get from the market last year."

Foreign external reserves stood at $6.4 billion as of April 5, according to the central bank's latest data, enough to cover 3.6 months of imports.

Njoroge said Kenya is also seeking a new loan under the Fund's Resilience and Sustainability Trust (RST) to help countries ensure sustainable growth.

"We have already started the work," he said, without disclosing the loan's potential size.

RST funds are capped at 150% of a country's IMF quota.

Kenya, along with other African frontier market nations, has been frozen out of international capital markets since early last year.

A combination of sticky high interest rates and lackluster global growth could push a number of weaker economies that are facing soaring refinancing needs into debt difficulties next year.

Njoroge said that "the government is quite relaxed about" its own $2 billion eurobond maturing in June 2024.

"The government has many options. They are keeping them close to their chest," he said without providing further details.

Inflation, meanwhile, was expected to ease to within the target zone of 2.5% to 7.5%, he said, as weather improves, lowering prices for locally produced food crops, though the price of imported maize could impact that.