Kenya Confident in Repaying $2 Billion Bond, Says Central Bank Governor

William Ruto

Kenya’s central bank governor, Kamau Thugge, has expressed confidence that the country will be able to repay a $2 billion international bond set to mature in June. Thugge’s reassurance comes amidst concerns over Kenya’s growing debt burden, currency depreciation, and uncertainty regarding access to financial markets.

The repayment of the bond is expected to aid in the recovery of the Kenyan shilling from record lows. Thugge stated that funds from the World Bank, other multilateral institutions, and regional banks are sufficient to cover the repayment of the bond.

“The risk of the Eurobond will, in my view, be completely eliminated. And that should also contribute to a strengthening of the shilling,” Thugge affirmed.

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Thugge also indicated that he believes the exchange rate has surpassed its equilibrium level, suggesting that there may be opportunities for the central bank to intervene and stabilize the currency going forward.

Kenya’s ability to repay the $2 billion bond is closely monitored by international observers due to concerns surrounding the country’s debt sustainability and economic stability. Thugge’s optimistic outlook provides a glimmer of hope for investors and policymakers, signaling Kenya’s commitment to fiscal responsibility and debt management.

As Kenya navigates through economic challenges, including the impact of the COVID-19 pandemic, maintaining investor confidence and financial stability remains a priority. Thugge’s assurance regarding the repayment of the bond offers a degree of reassurance to stakeholders, albeit against a backdrop of ongoing economic uncertainties.

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