The International Monetary Fund on Monday approved, as expected, a $509 million credit facility to help Kenya boost its international reserves.
The IMF said it will immediately disburse $101.7 million under the three-year extended credit facility.
The IMF said in a statement the funding will help address balance-of-payments financing needs and provide a reserve cushion to help the country deal with adverse shocks.
IMF First Deputy Managing Director John Lipsky said Kenya's economy was picking up after being hit by the effects of the global financial crisis and political uncertainty. The IMF said the funds would provide the needed foreign exchange reserves to ensure economic stability, it added.
Lipsky said Kenya's new constitution endorsed in a vote last year, had spurred confidence that the country would be able to address long-standing social and institutional problems, and will help bolster economic and other reforms.
The program will help maintain fiscal discipline as fiscal decentralization gets underway, while keeping inflation low in the context of Kenya's floating exchange rate regime, the IMF said. Kenya's inflation rose to 5.42 percent in January from
The Fund said the aim of the program was to:
* Raise gross domestic product to 7 percent
* Bring the public debt-to-GDP ratio to below 45 percent over the medium term
* Keep inflation at 5 percent while ensuring a floating exchange rate regime.