Kenya will know by end of December if it will receive an additional USD250million (Sh25billion) from the International Monetary Fund to boost its reserves. This will bring to Sh75billion the total amount the world lender of last resort has given the country under a scheme called Extended Credit Facility (ECF).

Fund officials have been in the country for the last two weeks holding meetings to assess how well the government is implementing economic policies agreed to under the ECF. Domenico Fanizza, who led the IMF team, said Kenya hadone well to meet agreed targets but admitted the country still faces challenges from inflation which could weaken economic growth.

Fanizza said IMF projects Kenya's economy to grow by five per cent in 2011 and by 5.5 per cent in 2012. Officials called on the Central Bank of Kenya to reduce the amount of cash circulating in the economy to reduce inflation. The fund projects that Kenya will close the year at around 17 per cent inflation with a 13.5 per cent average for the year.

IMF believes loans to the private sector are growing to fast and are likely to be contributing toward inflation in addition to high fuel and food prices. Fanizza said while credit to the private sector expanded by 36 per cent this year compared to last year, economic growth did not match that, suggesting most of the credit is not going toward economically productive sectors.