The World Bank said on Tuesday it had approved a $1 billion loan for Kenya to shore up its budget in the face of high debt and a weak currency.
The lending will be through an instrument called the Development Policy Operations (DPO) Loan, which commits Kenya to introducing reforms aimed at creating fiscal space, improving agricultural competitiveness and improving governance.
Reforms under the agreement include deregulating administrative prices for publicly purchased grain and streamlining the state's exit from commercial investments.
President William Ruto's proposal to raise taxes on a wide range of economic activities was hampered by civil servants and political opponents.
Kenya's finances have been strained by rising debt payments and the effects of the worst drought in four decades.
Earlier, Moody's downgraded Kenya's unsecured debt rating as well as the issuer's long-term foreign and local currency ratings, citing liquidity risks.