KENYA’S central bank governor, Kamau Thugge, announced on Wednesday that the country is well-positioned to repay a $2bn international bond maturing in June. This repayment is anticipated to alleviate concerns surrounding Kenya’s mounting debt burden and currency depreciation, particularly aiding the recovery of the shilling from its record lows.
Thugge addressed the pressing issue during a news conference, emphasising that incoming funds from various sources, including the World Bank, other multilateral institutions, and regional banks, are deemed sufficient to facilitate the repayment of the bond.
‘The risk associated with the Eurobond will be completely mitigated, thus contributing to the strengthening of the shilling,’ Thugge affirmed, noting the potential positive impact on the currency’s stability.
The announcement comes amidst growing scrutiny of Kenya’s financial management, marked by concerns over its escalating debt levels and uncertainties surrounding access to global financial markets.
In response to the shilling’s significant depreciation against the US dollar, Thugge highlighted the central bank’s readiness to intervene, suggesting possible measures to stabilise the exchange rate in the future.
Furthermore, Thugge stressed the role of overseas lenders and higher interest rates in providing additional support to the shilling, signalling optimism for the currency’s resilience.
Kenya has recently received substantial disbursements, totalling over $1bn in the past two months, with expectations of an additional $1.5bn from the World Bank between March and May, according to Thugge.
Despite economic challenges, Thugge remains optimistic about Kenya’s growth prospects, forecasting a GDP growth rate of 5.7 percent for the current year, compared to 5.6 percent in the previous year. While uncertainties persist, the central bank’s efforts aim to bolster confidence in Kenya’s economic stability and financial resilience.