IMF approves $110 mln loan for Kenya

The International Monetary Fund has approved the disbursement of $110.9 million to Kenya under the country's three-year loan program and warned the authorities to keep an eye on risks posed by the euro zone debt crisis and possibility of higher oil prices. In approving the disbursement, the IMF warned that an uncertain global environment could dampen growth, forecast by the IMF to rise this year, and widen the external current account deficit. The IMF has now loaned Kenya $421 million, under a 2011 deal which is likely to see the country receive $754 million, Associated Press reported. "Thus, policies should continue to aim at ensuring that domestic demand grows in line with supply to reduce the external imbalance and keep inflationary pressures in check," the IMF said in a statement. It said Kenya's economic reform program had started to yield results: inflation was lower, international reserves are up and the Kenyan shilling stronger. The government had also made progress on improving public financial management and tax reforms, the Fund added.