Kenya has cleared the balance US$ 556.97 million of the US$2 billion Eurobond that was due by 24th June 2024, and around which a lot of the fiscal policies have been geared to the last few years.
The settlement was done on Friday 21st, three days ahead of the maturity date.In February, the government partially settled the sovereign bond through a US$ 1.44 billion buyback accounting for about 72.3% of the principal amount.Kenya’s foreign exchange reserves saw a sharp rise last week to US$ 8,321 million meeting the 4 months CBK’s statutory requirement.The rise was due to the US$ 1.2 billion Development Policy Operations (DPO) World Bank loan that was to be channeled towards settling the Eurobond.
Earlier, investors had jittery concerns about the settlement of the Eurobond with some projecting liquidity and debt crisis. After the partial buyback in February, the shilling has been bullish, mirroring restored market confidence. Additionally, the stock market has been up, signaled by the 22% uptick in the All-Share Index.
“The policy dialogue around this DPO has helped to strengthen the macroeconomic framework, sustain an ambitious fiscal consolidation path, and tighten monetary policy,” said Keith Hansen, World Bank Country Director for Kenya, “After tackling the immediate fiscal pressures, the focus can now shift to addressing the country’s longer-term challenges.”
