IMF Approves Kenya's Loan Tranche

NAIROBI (Reuters) – The executive board of the International Monetary Fund (IMF) has approved the seventh and eighth reviews of Kenya's program, enabling the cash-strapped government to access a $606 million loan tranche.

The East African nation and IMF staff reached an agreement on the seventh review of its $3.6 billion program in June. However, completion at the board level and subsequent disbursement were disrupted by deadly protests.

More than 60 people were killed in the violent protests, which forced President William Ruto to abandon the government's finance bill that included several tax hikes.

"Kenya's economy remains resilient, with growth above the regional average, inflation decelerating, and external inflows supporting the shilling and a buildup of external buffers, despite a difficult socio-economic environment," said IMF First Deputy Managing Director Gita Gopinath in a statement.

The IMF also emphasized the need for improved governance and transparency in Kenya.

"The Kenyan authorities face a difficult balancing act of boosting domestic revenues to protect critical spending in priority areas while meeting heavy debt service obligations," the IMF stated.

The board review included a component of lending to Kenya under its sustainability window, known as RSF.

The IMF's support is viewed as essential for Kenya to navigate its current liquidity challenges, primarily driven by high debt interest repayments.

Government officials have indicated that Kenya will seek another program with the IMF when the current one concludes next April.