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NAIROBI, April 13 (Reuters) - Kenya has agreed to borrow $600 million from foreign creditors at an interest rate of 7 percent, a senior Treasury official said on Friday.
The east African nation desperately needs the loan to plug a funding shortfall for its fiscal year ending June 2012 after local borrowing rates soared and full-year revenue collections showed signs of falling below target.
Geoffrey Mwau, economic secretary at the ministry of finance said it was not clear when the government would sign an agreement with the three banks that won a bid to arrange the loan, Standard Chartered, Citibank and South Africa's Standard Bank.
"They (negotiations) are basically done. It should be 7 percent," Mwau told Reuters by phone.
Finance Minister Robinson Githae had told reporters on Wednesday that the government was renegotiating the terms of the loan to ensure they get the best deal.
Githae had also said he would ask for evidence that the funds would be sourced offshore, to ensure that the lenders did not mop up hard currency locally, piling pressure on the shilling.
The shilling slumped last year, causing anger among citizens due to the resulting rise in prices of imported goods, forcing policymakers to sharply raise interest rates. (Reporting by Duncan Miriri; Editing by George Obulutsa and Patrick Graham)