Kenya Weighs Using SDR Allocation From IMF to Pay Debts to China

The Kenyan government is considering using its allocation of Special Drawing Rights (SDRs) from the International Monetary Fund to repay some of its outstanding debts to China, according to a report in the Business Daily newspaper.

While at first glance, the plan sounds controversial given that the IMF abhors using its funds to repay debts (generally it prefers to finance initiatives that spur economic growth), but with SDRs it’s different. SDR recipients are actually permitted under IMF rules to use SDR allocations to “settle obligations.”

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by Eric Olander

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