NAIROBI, Jan 7 (Reuters) - The International Monetary Fund's executive board will meet on Jan. 17 to approve an agreement to grant Kenya immediate access to a $682.3 million tranche and boost its current lending programme by $938 million.
The East African nation has been grappling with acute liquidity challenges caused by uncertainty over its ability to access funding from financial markets before a $2 billion Eurobond matures in June this year.
Once the IMF board signs off on the deal, initially unveiled on Nov. 16, Kenya will have access to a total of $3.88 billion, which would bring its total funding under the existing Extended Fund Facility and Extended Credit Facility arrangements to $4.43 billion.
The board review, which is the sixth under the current facility first agreed in April 2021, was contained in its latest online calendar of meetings seen by Reuters on Sunday.
News of the IMF deal in November helped to soothe nervous markets because the amount Kenya will get in hard currency was bigger than expected.
The government had said it would partially buy back a $300-500 million portion of the bond that is maturing this June by the end of last year, but the self-imposed deadline came and went without the transaction being carried out.
It is still not yet clear if the government will press ahead with an early buy-back or wait until June to pay off the bond in full.
The government is also counting on hard currency financing from the World Bank and regional lenders to help it settle maturing foreign debts, after its currency weakened significantly and hard currency reserves started to fall.
Kenya's balance of payments and financial positions have also been strained by the legacy of the COVID-19 pandemic and frequent climate change-induced droughts, the IMF said in November. (Reporting by Duncan Miriri Editing by Ros Russell)
