The IMF approved the disbursement of $739m to be drawn under the Rapid Credit Facility to support Kenya’s response to the COVID-19 pandemic.
The COVID-19 pandemic is taking a serious toll on the Kenyan economy, significantly reducing growth, creating fiscal and external financing needs.
It is important that the authorities resume their fiscal consolidation plans to reduce macroeconomic vulnerabilities once the crisis abates.
The Executive Board approved the disbursement of SDR542.8 million (100 percent of quota, about $739 million) to be drawn under the Rapid Credit Facility (RCF). This will help to meet Kenya’s urgent balance of payments need stemming from the outbreak of the COVID-19 pandemic.
The impact of COVID-19 on the Kenyan economy will be severe. It will act through both global and domestic channels, and downside risks remain large. While the authorities have taken decisive action to respond to the pandemic’s health and economic impacts, the sudden shock has left Kenya with significant fiscal and external financing needs. Authorities have committed to resume their fiscal consolidation plans once the crisis abates to reduce debt vulnerabilities.
The RCF will help the authorities to address those needs. It will allow them to maintain an adequate level of international reserves and help provide the budget financing needed to respond to the pandemic.