S&P Global plans to wait until a scheduled review date on August 23 to decide whether to cut Kenya's sovereign credit rating following deadly turmoil in the country that has seen tax hikes abandoned and the entire cabinet sacked.
Giulia Filocca, S&P's lead analyst on Kenya, said the firm was likely do one of two things - either cut Kenya's B credit score by one notch to B-, or leave it where it is and keep it on downgrade warning by maintaining its "negative outlook".
"I think that (August review data) is a more appropriate time to take a call than potentially abruptly today with some missing information or incomplete information," Filocca said in an interview with Reuters alongside S&P's top regional analyst Ravi Bhatia.
At that point, "we will have more clarity around the IMF," she added. "We will have more clarity around the appropriation bill, the spending allocations, the final budget, the finance bill (and) potentially the new cabinet members."
Filocca said retaining IMF support remained particularly crucial for Kenya given its stretched finances.
It managed to sell an international bond earlier this year partly on the back of that support, but it also spends over 30% of its revenues just paying the interest bills on its debt. That is one of the five worst ratios in the world.
Under pressure, Kenyan President William Ruto's government took a step on Monday to try and keep the IMF on its side, saying it would cut 2024-25 spending by 1.9% to claw back some of the money that it had hoped to bring in from the now-scrapped tax hikes.
Bhatia said that although Kenya's finances would be worse off following all the upheaval - which was sparked by widespread youth protests - S&P didn't expect it to scupper the country's IMF programme altogether.
"Yes, the reviews might be postponed or they miss some conditionalities, but they have a lot of support from the international donor community," Bhatia said. "So we don't expect a full derailing of the IMF programme."
The IMF said last week it was assessing the "evolving circumstances" in Kenya and was making adjustments to its numbers.
