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Kenya Inks Deferred-Payment Oil Deals


FILE - An Emirati man is seen near the logo of ADNOC in Ruwais, United Arab Emirates May 14, 2018. ADNOC has cut a deal with Nairobi to delay payment on petro deliveries to help Kenya's foreign exchange situation.
FILE - An Emirati man is seen near the logo of ADNOC in Ruwais, United Arab Emirates May 14, 2018. ADNOC has cut a deal with Nairobi to delay payment on petro deliveries to help Kenya's foreign exchange situation.

NAIROBI - Kenya has signed deals with UAE's ADNOC and Saudi Aramco for the supply of petroleum products with a six months credit period, its energy minister said on Monday, a move designed to curb demand for dollars that has weakened the local currency.

The East African nation is Switching to the longer payment period from settlement on delivery, to remove the need for importers to spend hundreds of millions of dollars every month.

The deals were signed on March 10, Energy Minister Davis Chirchir told a news conference, after these two firms were picked from seven bidders.

Foreign currency traders have cast doubt on the ability of the plan to stem the pressure on the shilling currency, saying it merely amounts to a postponement of demand.

The plan is also being challenged by some private petitioners at the High Court. The court is expected to give its initial directions on the case on Tuesday.

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