International Monetary Fund (IMF) announced in statement dated March 14, 2016, that its board has approved a $1.5 billion loan to Kenya, under a two-year Stand-by Arrangement.

“Kenya’s recent performances in terms of economic growth remain strong but despite positive policy steps taken by authorities in the framework of the IMF-backed aid program, the economy remains vulnerable to shocks, reflecting less favorable global financial market conditions, as well as continued security threats and potential extreme weather events,” the fund said in the statement.

“In this context, the new precautionary arrangement would provide a policy anchor for continued macroeconomic and institutional reforms and would help mitigate the impacts of potential exogenous shocks if they were to materialize,” the institution added.  

Last mid-December, IMF announced it scaled down growth forecasts for Kenya to 6% for 2016, from 6.8%.

The Stand-by arrangement is an IMF facility which involves the provision of financial assistance to a member state facing a crisis, under the condition that the concerned state respect the terms of the arrangement.