NAIROBI, Feb. 22 (Xinhua) — Kenya’s National Treasury mentioned Wednesday that it intends to problem syndicated bonds in native forex within the monetary yr 2023/2024 because it explores new methods to boost cash to finance the nation’s 3.6 trillion shillings (about 28.56 billion U.S. {dollars}) finances.
The Treasury mentioned in its debt administration technique that the bonds wouldn’t solely assist increase extra sources but additionally cushion the nation’s debt from international forex depreciations.
Syndicated bonds are primarily issued by corporations or governments to generate funds, the place the issuer finds a bunch of banks or different lenders to underwrite the bond.
The underwriting banks then promote the bond to buyers, and if all shouldn’t be bought, the banks purchase what’s left.
This approach, the federal government is assured to boost the complete quantity it wants.
Kenya has prior to now taken varied syndicated loans from international banks, with business loans comprising 27 % of the whole exterior debt.
The Kenyan shilling has depreciated 10 % within the final one yr in opposition to the U.S. dollar, hitting 126 to the dollar Wednesday.
This has considerably elevated Kenya’s debt, which is principally dollar-denominated. The public debt at the moment stands at 71.18 billion {dollars}, half of which is exterior.
“Currency depreciation increases debt service costs. The major currencies in the external debt portfolio are U.S. dollar at 68.1 percent; Euro at 19.8 percent; Chinese Yuan at 5.4 percent; Japanese Yen at 4.2 percent and Great Britain Pound (GBP) at 2.3 percent,” mentioned the National Treasury.