Impact Of External Debt On Inflation And Exchange Rate In Kenya

ABSTRACT External financing is necessary for many low-income countries to achieve their development objective. External borrowing compliments savings and permits an economy to carry out investment activities. It is expected to provide financing necessary for investment in infrastructure and productive economic activities thus contributing to economic growth and macroeconomic stability. Kenya has depended to a great extent on external borrowing to finance its budget. Data from National Treasury and Central Bank shows that Kenya’s external debt surged from 18.8 per cent of GDP in 2013 to 30 per…