Kenya has asked the World Bank for rapid financial support to help cushion the economic impact of the war in Iran, as pressure builds on energy imports and inflation risks, Reuters reported.
Central bank governor Kamau Thugge said the request, described as “significant”, was made as the country works to stabilise fuel supply and manage rising costs.
He did not disclose the amount involved, noting that the support would come in addition to ongoing discussions around a separate budgetary support loan known as development policy operations.
The funding request comes as countries reliant on imported energy face supply risks and price increases following the conflict.
Rapid Response Support, the World Bank’s fast-disbursing financing mechanism, is designed to help governments respond quickly to such shocks.
Kenya’s currency saw limited volatility during the peak of the conflict involving the U.S., Israel and Iran. Thugge said the shilling weakened slightly but has since recovered most of its losses.
“If there’s pressure….definitely it will depreciate,” he said, adding that the central bank is prepared to manage any instability.
“What I would say is that depreciation will be orderly. The whole point about why we have been building these international reserves to where they are, to the highest levels, was precisely to be able to avoid excessive volatility.”
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Foreign exchange reserves remain strong, standing above $13 billion, equivalent to 5.8 months of import cover.
The central bank is also advancing plans to diversify its reserves by adding gold, with policymakers reviewing domestic purchase models used in other countries.
On interest rates, Thugge said future decisions would depend on economic data ahead of the next policy meeting in June. The central bank recently held rates steady, pausing its easing cycle to assess the impact of rising oil prices.
What this means for Africa
Kenya’s move reflects the broader vulnerability of African economies to global energy shocks. It also highlights the growing role of multilateral institutions like the World Bank in providing rapid financial support during crises.
As countries look to strengthen reserves and diversify assets, strategies such as gold accumulation and cautious monetary policy may become more common across the continent.
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Image Credit: Daily Post
