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Kenya to get $750 mln World Bank loan within two weeks -central bank head

Credit: REUTERS/THOMAS MUKOYA

Kenya expects to receive a loan of $750 million from the World Bank in the next two weeks to support its budget, the country's central bank governor Patrick Njoroge said on Thursday.

Adds details

NAIROBI, May 27 (Reuters) - Kenya expects to receive a loan of $750 million from the World Bank in the next two weeks to support its budget, the country's central bank governor Patrick Njoroge said on Thursday.

The East African nation has been scrambling to secure cash from abroad to fill a gaping budget deficit before its financial year closes at the end of next month.

In 2019, Kenya qualified for the World Bank's Development Policy Operations (DPO), which lends cash to the Treasury for budget support instead of financing specific projects.

"There is a loan, the so-called DPO, of an amount of $750 million, which we expect over the next couple of weeks," Njoroge told a news conference.

Kenya has received two previous loans from the World Bank in the last two years.

The International Monetary Fund, which approved funding worth $2.34 billion for Kenya in April, is expected to complete its latest review next month, leading to the disbursement of $410 million, Njoroge said.

More financing will come from the African Development Bank, Njoroge said, without providing a figure.

"We expect the current account deficit to close at about 5.2% of GDP in 2021 and it will be fully financed of course," he said. "We also expect an increased level of reserves from the flows."

The government is also poised to issue new dollar bonds to raise $1 billion by the end of next month, but Njoroge did not comment on the issue.

Officials in Nairobi plan to seek an extension of the G20's debt-suspension initiative, aimed at helping poorer nations cope with the shocks caused by the COVID-19 pandemic, Njoroge said, without providing further details.

"It (extension) will free resources that can be used for other purposes, in particular the recovery from COVID," he said.

(Reporting by Duncan Miriri; Editing by Pravin Char)

((duncan.miriri@thomsonreuters.com; Tel: +254 20 4991239; Reuters Messaging: duncan.miriri.thomsonreuters.com@reuters.net))

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