Kenya’s shilling appreciated against the dollar as the International Monetary Fund approved disbursement of $110.9 million and said economic reforms undertaken by the East African nation are yielding results.
The currency of East Africa’s biggest economy advanced 0.1 percent to 83.10 per dollar by 2:38 p.m. in Nairobi, the capital.
“It will ease dependence on local borrowing by the government and if it goes toward import cover it also has a positive impact,” Bernard Matimu, chief dealer at Nairobi-based NIC Bank Ltd., said in a phone interview today.
The IMF approval brings the amount the fund the amount the fund has disbursed to Kenya under the three-year Extended Credit Facility to $420.7 million, it said in an e-mailed statement today.
“The authorities have taken decisive measures to address inflationary and external balance pressures,” the Washington-based lender said. “As a result, inflation is abating, the shilling has strengthened, international reserves are on the rise, the debt-to-GDP ratio is declining and the government securities market is functioning more smoothly.”
Kenya will continue its “tightening monetary policy” stance to curb inflation and stabilize its currency, Finance Minister Njeru Githae said April 11. The inflation rate fell for a fourth month to 15.61 percent in March from 16.69 percent in February, the Kenya National Bureau of Statistics said last month.
Tanzania’s shilling was unchanged at 1,590 per dollar, while Uganda’s currency gained 0.1 percent to 2,510.50 per dollar, according to data compiled by Bloomberg.