IMF Executive Board Approves a US$739 Million Disbursement to Kenya to Address the Impact of the COVID-19 Pandemic
The funds disbursed on 6th May 2020 will help meet Kenya’s urgent balance of payments need stemming from the outbreak of the COVID-19 pandemic. The funds drawn under the Rapid Credit Facility are meant to support the authorities’ response to the COVID-19 pandemic
Tao Zhang, Deputy Managing Director and Acting Chair stated that “The COVID-19 pandemic has delivered a large economic shock to Kenya. The pandemic has impacted nearly all facets of the economy particularly tourism, transport, and trade and led to an urgent balance of payments and fiscal financing needs”
Emergency financing under the RCF will deliver liquidity support to help Kenya cover its balance of payments gap this year. It will provide much-needed resources for fiscal interventions to safeguard public health and support households and firms affected by the crisis. It will also catalyze necessary financing from other donors.
To ensure that COVID-19 related resources are used for their intended purpose, the authorities plan to conduct independent post-crisis auditing of COVID-19 related expenditures and publish the results.
The Central Bank of Kenya (CBK) has taken various measures to maintain sufficient liquidity in the financial sector. It should continue to stand ready to further support the economy and the financial sector’s health, as necessary while ensuring that policy decisions are data-driven. The CBK should also continue to allow the exchange rate to act as a shock absorber.