Kenya is set to receive a loan of Sh46 billion ($300 million) from the Trade and Development Bank (TDB) in the first half of December, according to the Central Bank of Kenya (CBK) governor Patrick Njoroge. The loan will help the country to stabilize its currency, the Kenyan shilling, which has been depreciating against the US dollar in recent months.
Njoroge said the loan was part of a $750 million package that Kenya had secured from the TDB, a regional multilateral development bank that supports trade, economic development and regional integration in Africa. He said the first tranche of $450 million was disbursed in June and the second tranche of $300 million was expected to be disbursed by mid-December.
Based on his sentiments, the loan would help to boost the country’s foreign exchange reserves, which stood at $8.9 billion (5.8 months of import cover) as of November 25, 2023. He said the reserves were adequate to cushion the economy from external shocks and to maintain confidence in the shilling.
He said the depreciation of the shilling was mainly due to the strengthening of the US dollar in the global market, as well as the increased demand for foreign currency from importers and investors. He said the CBK was closely monitoring the exchange rate and intervening when necessary to smooth out volatility and ensure stability.
He added the CBK was also implementing various policy measures to support the recovery of the economy from the impact of the COVID-19 pandemic, such as maintaining an accommodative monetary policy stance, providing liquidity support to banks and borrowers, and facilitating the use of digital payments.
According to him, the economy was projected to grow by 6.3 percent in 2023, up from 0.6 percent in 2022, driven by the recovery of key sectors such as agriculture, manufacturing, construction, tourism and ICT. He said the inflation rate was expected to remain within the target range of 2.5-7.5 percent, despite the upward pressure from rising fuel and food prices.