MatataMingi wrote:i think that it is impossible for Kenya to default on payments on T Bills & Bonds that are in local KES.
If they did that, most Banks, Pension Funds, Mutual Funds etc.in Kenya would collapse.
Just check their Balance Sheets, to see how much they have invested in these.
I'm not a finance expert, but in my view, the gov has already technically defaulted at least twice in the recent past. I recall local lenders to KQ being forced into a debt for equity swap in 2017. Technically, as guarantor, they defaulted. More recently, instead of refunding OMCs subsidies, they convinced them to swap debt for bonds. Some of that debt (for those who held out) is still outstanding.
When US Export-Import bank issued Kenya with a default notice last year(guaranteed KQ loan again), they couldn't pull the move they had previously done with local banks.
Clearly, there is precedent of local debt restructuring.