The government has taken a soft stance on the repayment of the Ksh287 billion Eurobond a week after Moody’s Debt Service warned Kenya of its plan to buy back almost half of the amount before maturity.
President William Ruto had announced that the Treasury was exploring means to pay half the loan before its maturity date on June 2024 through the buy-back plan.
Moody's warned that this would be classified as default, but the government on Thursday seemed to be exploring ways to repay upon maturity next year.
Central Bank of Kenya Governor Kamau Thugge during the Monetary Policy Committee briefing stated that the country was in a good place financially to fulfill all its debt obligations.
“What we are expecting is a significant flow between now and December. That discussion about the modalities, and how we are going to do it is still ongoing," he stated.
"Suffice to say that we will have enough international reserves to be able to deal with the Eurobond from even a cash point of view by next June.”
Thugge assured Kenyans that there were plans in place to make sure that Kenya did not default on the loan which was advanced to Kenya during former President Uhuru Kenyatta’s tenure.
He stated that he believed that Kenya had enough reserves to be able to pay all the people holding the Eurobond.
Moody’s had earlier warned Ruto’s administration of trying to shortchange investors by buying back the bonds at a sub-bar price.
The agency remarked that this was akin to hurting investors' margins and warned the buyback would be classified as default.
Days later, Ruto accused the firm of intimidating Kenya in a bid to occasion a default so that the country could pay hefty interest rates and fines.
He maintained to continue with the plan of early buyback noting it was one of his government’s plans to tame the ballooning public debt.
