Kenya to make $500m bond payment with World Bank loan
TLDR
- Kenya plans to allocate $500 million from a World Bank loan to pay off a Eurobond, per Central Bank of Kenya Governor Kamau Thugge.
- The country aims to manage public finances better amid concerns about debt repayment, following a $1.5 billion international bond issuance earlier.
- Anticipated World Bank disbursements of about $1.2 billion will support Kenya's debt obligations and development policy operations.
Kenya is planning to allocate a portion of a World Bank loan, specifically around $500 million, to make a payment on a Eurobond due this month, stated the Central Bank of Kenya Governor Kamau Thugge.
This strategy is part of efforts to manage its public finances, especially amidst concerns about its ability to repay debts. The country had previously issued a $1.5 billion international bond in February, with a significant portion allocated to repurchase a portion of the $2 billion bond maturing in June.
The anticipated disbursements from the World Bank, totaling about $1.2 billion, are related to development policy operations, providing additional financial support for Kenya's debt obligations.
Key Takeaways
Kenya's economy is estimated to have grown by 5.8% in the first quarter of this year, following a 5.6% growth rate in 2023. On Wednesday, the Central Bank of Kenya maintained its benchmark lending rate at 13.0%. The bank stated that this decision was aimed at ensuring inflation remains stable around the mid-point of its target range in the near term. When asked about the possibility of future rate cuts, the central bank indicated that it would consider external economic developments before deciding on the direction of its benchmark rate. This cautious approach highlights the bank's commitment to balancing growth and inflation amid varying global economic conditions.
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