Kenya has sought emergency financial backing from the World Bank to cushion its economy against shocks stemming from the ongoing tensions involving Iran.
Speaking to Reuters on the sidelines of the IMF-World Bank Spring Meetings on April 16, Central Bank Governor Kamau Thugge said the financing request was significant but did not specify an amount.
The proposed assistance falls under the World Bank’s rapid response financing mechanisms, which are designed to provide quick-disbursing funds and policy support to countries facing economic shocks.
Reuters reported that the support would be in addition to ongoing discussions on a separate budgetary assistance programme, commonly known as Development Policy Operations.
CBK Governor Addresses Performance of the Kenyan Shilling
Thugge also indicated that while the Kenyan shilling faced some pressure at the height of the conflict involving the U.S., Israel, and Iran, it has since regained much of the lost ground.
He maintained that any future depreciation would be gradual, supported by the country’s strong foreign exchange reserves.
According to the governor, Kenya’s hard-currency reserves currently stand at over $13 billion, providing an import cover of about 5.8 months.
“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,” Thugge said.
Also Read: Kenya Gets Boost as World Bank Pumps Millions of Dollars into Road Project
In addition, the Central Bank is moving ahead with plans to diversify its reserves by incorporating gold.
Thugge said to Reuters that policymakers are reviewing models used by other countries to guide potential domestic gold purchases.
On monetary policy, he noted that future interest rate decisions will depend on incoming economic data ahead of the next policy meeting, scheduled for June.
Also Read: World Bank Explains Why International Investors Are Turning to Kenya
World Bank Lowers Kenya’s 2026 Growth Estimate
This comes after Kenya dealt a blow when the World Bank downgraded its economic growth estimate for this year, 2026.
In its latest April Africa Economic Update report, the World Bank lowered Kenya’s economic growth to 4.4 due to high debt service, global pressures, and regional conflicts.
“The creditor composition of Sub-Saharan Africa’s public external debt has shifted markedly over the past decade, reshaping countries’ exposure to global financing conditions, borrowing costs, and refinancing risks,” read part of the report.
World Bank urged Kenya to adopt more targeted fiscal and industrial policies to sustain growth and shield its economy from external shocks, amid rising global uncertainties.
The multilateral lender further noted that while the Kenyan government has attempted to cushion consumers from rising energy costs by repurposing fuel levies and stabilization funds, such measures are often costly and less effective.
Instead, resources should be redirected toward programs that enhance shock preparedness and expand access to employment, particularly within rural agricultural value chains.
