KENYA will use a portion of a World Bank budget support loan to make a $500 million payment on a Eurobond maturing this month, Central Bank of Kenya Governor Kamau Thugge announced on Thursday.
‘We do expect some disbursements from the World Bank of about $1.2bn related to development policy operations. Part of that will be used to settle the $500 million of the remaining Eurobond,” Thugge said during a news conference.
The East African country had previously sold a $1.5bn international bond in February to fund the buyback of a significant portion of the $2bn bond maturing in June, amid investor concerns over Kenya’s strained public finances.
When questioned about a World Bank report indicating the government’s plans for another buyback later this year, Thugge responded that the bank is still in discussions with the Treasury.
Despite recent flooding, Thugge reaffirmed the central bank’s economic growth forecast of 5.7 percent for this year, citing the resilience of the services sector and strong performance in agriculture. Kenya’s economy is estimated to have grown 5.8 percent in the first quarter of this year, following a 5.6 percent growth in 2023.
On Wednesday, the central bank maintained its benchmark lending rate at 13.0 percent, aiming to keep inflation stable around the midpoint of its target range in the near term.
In response to questions about future rate adjustments, Thugge said, ‘The bank will look at external developments before deciding what direction its benchmark rate will take at the appropriate time.’
Kenya’s strategic financial manoeuvres, supported by international loans and bonds, aim to stabilize its economy and maintain growth despite external and internal challenges.
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