Kenya asks IMF for precautionary loan of about $750 mln

by Reuters 0

The International Monetary Fund’s resident representative said on Monday.

Armando Morales told Reuters the request was contained in a letter from the Kenyan government received by the IMF last Friday.

The request will be considered by the IMF board on 2 February, he said, adding the facility could help the east African nation deal with a range of potential shocks.

(READ MORE: Kenya to receive emergency cushion from IMF)

“They could be weather-related. They could be security-related. It could also be a change in foreign investor sentiments affecting capital inflows,” Morales said.

The shilling weakened gradually last year after a series of gun and grenade attacks scared off tourists, slowing inflows from an important source of foreign exchange.

It is down 1.22 per cent this year mainly due to a firmer dollar.

If the insurance type-loan is granted by the IMF, it will run for one year with the option for renewal, Morales said. IMF loans to Kenya are usually used to shore up the central bank’s foreign exchange reserves to cushion the economy from shocks.