{"id":107787,"date":"2023-11-28T18:21:40","date_gmt":"2023-11-28T18:21:40","guid":{"rendered":"https:\/\/www.africa-press.net\/kenya\/all-news\/kenyas-eurobond-headache-as-due-date-draws-near"},"modified":"2023-11-28T19:07:04","modified_gmt":"2023-11-28T19:07:04","slug":"kenyas-eurobond-headache-as-due-date-draws-near","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/kenya\/all-news\/kenyas-eurobond-headache-as-due-date-draws-near","title":{"rendered":"Kenya’s Eurobond headache as due date draws near"},"content":{"rendered":"

Africa-Press – Kenya. <\/strong><\/span>Kenya may be forced to dip into the forex reserves reserves to payback part of the maturing Eurobond, a situation that could see the shilling fall further.<\/p>\n

The Parliamentary Budget Office (PBO) however warns that repaying the entire $2 billion (Sh306 billion) Eurobond out of forex reserves may unnerve the market band saying a mixed payment plan seems the only viable option.<\/p>\n

The position taken by the budget team comes at a time that the reserves have continued to drop below the statutory requirement to hit Sh1.03 trillion as of November 24, equivalent to 3.6 months of import cover.<\/p>\n

PBO notes that despite concerns about credit ratings, a buyback at par, or below par, is a viable option because it would imply willingness to pay.<\/p>\n

Central Bank of Kenya governor Kamau Thugge had earlier assured MPs that Kenya would not touch its reserves to payback the Eurobond.<\/p>\n

Instead the governor said the country would buy back Sh$500 million (Sh76 billion), part would be settled by loans from the World Bank and IMF expected in the coming months to March 2024, while the balance would be deferred.<\/p>\n

The parliamentary report however notes that there are concerns on the effects of the liability management options available for the government regarding the maturing Eurobond.<\/p>\n

\u201cAlternatively a blended strategy, that perhaps includes a partial buyback via an open tender and a smaller pay-out from FX reserves, may appear more reasonable. The authorities may opt to pay the Jun 2024 Eurobond maturity out of FX reserves,\u201d the PBO Quarterly Economic & Fiscal Update for July-September 2023 reads.<\/p>\n

Whichever liability management route the government opts for, whether a buyback or paying out from FX reserves, in the absence of a new Eurobond issuance, the government would need new funding from external markets.<\/p>\n

The options include IMF, World Bank, and syndicated loans via multilateral agencies.<\/p>\n

However, in a new development on November 28, Kenya indicated it had abandoned plans to access international financial markets this fiscal year, to repay its debt.<\/p>\n

This has been attributed to the high cost of dollar debt, according to Treasury Secretary Njuguna Ndung\u2019u.<\/p>\n

Instead the country is seeking for less expensive concessional funding.<\/p>\n

This has seen Kenya go easy on the floating a new bond on the international market in the medium term after getting fresh funding commitments from multilateral lenders.<\/p>\n

National Treasury Njuguna Ndung\u2019u in a statement said the country\u2019s financing strategy going forward would be to seek concessional funding as the bond market is currently unfavourable.<\/p>\n

The announcement comes following fresh financing from the International Monetary Fund to the tune of Sh 142.6 billion ($938m) under Extended Fund Facility (EFF) and Extended Credit Facility.<\/p>\n

IMF commitment under the arrangements is expected to reach Sh673.4 billion ($4.43b) upon approval by the executive board.<\/p>\n

On Monday 20, the World Bank announced total commitment to the tune of Sh1.82 trillion ($12b) in the next three years from 2024 to 2026.<\/p>\n

For More News And Analysis About Kenya<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Kenya. Kenya may be forced to dip into the forex reserves reserves to payback part of the maturing Eurobond, a situation that could see the shilling fall further. The Parliamentary Budget Office (PBO) however warns that repaying the entire $2 billion (Sh306 billion) Eurobond out of forex reserves may unnerve the market band […]<\/p>\n","protected":false},"author":84,"featured_media":107786,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[6857,7003,544],"class_list":["post-107787","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-kenya","tag-kenya"],"yoast_head":"\nKenya's Eurobond headache as due date draws near - kenya<\/title>\n<meta name=\"description\" content=\"Kenya may be forced to dip into the forex reserves reserves to payback part of the maturing Eurobond, a situation that c ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/kenya\/all-news\/kenyas-eurobond-headache-as-due-date-draws-near\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Kenya's Eurobond headache as due date draws near\" \/>\n<meta property=\"og:description\" content=\"Kenya may be forced to dip into the forex reserves reserves to payback part of the maturing Eurobond, a situation that c ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/kenya\/all-news\/kenyas-eurobond-headache-as-due-date-draws-near\" \/>\n<meta property=\"og:site_name\" content=\"kenya\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2023-11-28T18:21:40+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-11-28T19:07:04+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/kenya\/sites\/28\/2023\/11\/sm_1701185714.02998.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1000\" \/>\n\t<meta property=\"og:image:height\" content=\"666\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/kenya\/all-news\/kenyas-eurobond-headache-as-due-date-draws-near#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/kenya\/all-news\/kenyas-eurobond-headache-as-due-date-draws-near\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/kenya\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Kenya’s Eurobond headache as due date draws near\",\"datePublished\":\"2023-11-28T18:21:40+00:00\",\"dateModified\":\"2023-11-28T19:07:04+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/kenya\/all-news\/kenyas-eurobond-headache-as-due-date-draws-near\"},\"wordCount\":500,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/kenya\/all-news\/kenyas-eurobond-headache-as-due-date-draws-near#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/kenya\/sites\/28\/2023\/11\/sm_1701185714.02998.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-Kenya\",\"Kenya\"],\"articleSection\":[\"all news\",\"economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/kenya\/all-news\/kenyas-eurobond-headache-as-due-date-draws-near#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/kenya\/all-news\/kenyas-eurobond-headache-as-due-date-draws-near\",\"url\":\"https:\/\/www.africa-press.net\/kenya\/all-news\/kenyas-eurobond-headache-as-due-date-draws-near\",\"name\":\"Kenya's Eurobond headache as due date draws near - 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