Kenya will in December pay back $300 million of a $2 billion Eurobond that falls due next June, says President William Ruto.

The East African nation is being watched closely to see how it handles the bond due to its growing debt repayments, weakening currency and a surge in yields that has effectively locked out many frontier economies from markets.

"I can now confirm with confidence that we will and we shall pay the debt that has become a source of much concern to citizens and markets," Ruto said in his State of the Nation address to parliament on Thursday.

Kenya's government is spending roughly half its revenue on debt-servicing, squeezing public finances.