Wednesday, July 14, 2021 – The International Monetary Fund (IMF) has threatened to stop funding Kenya should the country breach the set inflation targets.
One of the conditions stipulated by IMF for the programme agreed in February 2021, is that Kenya should maintain a target of five percent plus or minus 2.5 percent in order to ensure the price stability of the country.
However, data from the Kenya National Bureau of Statistics (KNBS) shows that the inflation rate rose from 4.1 percent in September 2020 to 6.5 percent in June 2021.
The IMF has warned that Kenya should lower the targets if it seeks to continue receiving funds from the international body.
It added that if the country exceeds the targets, funding will be stopped until a consultative meeting between the IMF executive board and the Kenyan government takes place.
“When the consultation with the IMF Executive Boards is triggered, access to fund resources will be interrupted until the consultation takes place,” IMF stated.
The policy of inflation rates is among the conditions stipulated by IMF during its agreement with Kenya.
Among the conditions include the government enforcing wealth declarations for all public servants to curb corruption, reforms to be implemented in selected parastatals to return them to profit-making organizations.
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