President William Ruto on Wednesday, February 21, disclosed that the government saved Ksh722 billion in public debt repayment.
Ruto, speaking to the press in Naivasha, attributed the decrease in debt servicing costs to the stringent monetary policy measures implemented by the Treasury to manage debt liabilities.
The head of state remarked that the sound debt management strategies and overall fiscal and economic management policies by the Central Bank of Kenya strengthened investor confidence.
As a consequence, investor confidence in Kenya’s monetary policies resulted in the appreciation of the shilling against the US dollar, from Ksh162 to Ksh142 within one week, reducing Kenya's public debt by Ksh722 billion.
President William Ruto speaking during a joint National Executive Retreat and Parliamentary Group consultative meeting in Naivasha, Nakuru County on February 19, 2023.
PCS
The strengthening of the shilling will also contribute to a reduction of Kenya's debt servicing expenses by Ksh195 billion over the next six years, thereby saving the country a cumulative total of Ksh917 billion in debt repayment.
The buyback of the Ksh316 billion (USD2 billion) Eurobond before its maturity in June this year is among the monetary policies implemented by the government.
According to Ruto, the govt received more than six billion dollars in offers for the new Eurobond, evidence of investor confidence in the country’s monetary policies.
"The successful execution of both the buy-back and the new bond issue demonstrates strong investor confidence in Kenya through the international capital markets, and a vote of confidence in the government's overall economic management," Ruto stated.
"As a result of robust measures to enforce fiscal discipline and implement prudent debt management, the successful turnaround has pulled Kenya away from the brink of debt distress," the head of state added.
President Ruto also credited investor confidence for the recent oversubscription of the Central Bank of Kenya's (CBK) infrastructure bonds, which raised three times its initial target. The Treasury successfully raised Ksh241 billion from foreign investors who subscribed to the infrastructure bonds.
The auction of the tax-free bonds was conducted between January 24 to February 14, 2024, with the bonds set to attract interest twice a year starting in August.
“I am delighted to announce that our sacrifices and determined efforts have not been in vain,” Ruto added.
CBK Governor Kamau Thugge speaking at the Africa Climate Business Forum on November 2, 2023.
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Central Bank of Kenya
