Central Bank of Kenya governor Patrick Njoroge said yesterday he is unable to tame the fall of the shilling, throwing the economy into darkness as many importers were looking to him for some quick relief.
Dr Njoroge, who took over in late June as governor, appeared cautiosly optimistic that the shilling will soon regain stability after volatility that has seen it lose about 15% since January. He told the Senate committee on Finance, Commerce and Budget that the CBK has no target for the exchange rate, giving the shilling free will.
He said last weekend’s visit by US President Barack Obama and the world’s top entrepreneurs attending the Global Entrepreneurship Summit was a positive for foreign and local investors.
ALSO READ: TOUGH TIMES AHEAD AS CBK HIKES LENDING RATE
“There is more confidence and people are placing positive bets,” he is quoted by Business Daily as saying. “There is foreign currency coming into the market. Hotels were full not just for the visit, but there has been a spillover effect. We couldn’t have done a better job advertising the country to the world.”
Dr Njoroge said positive confidence arising from the summit was not just in the tourism sector, but across the entire economy. “We are cautiously optimistic. I use this deliberately because we have brought down volatility in exchange rate. The markets were quiet last week,” he said.
The governor said the CBK’s focus would stay on stemming volatility in the exchange rate. A large import bill, shrinking exports, tourism slump, huge public debt and other external factors are to blame for the shilling’s fall.
“The total debt stood at 51% at end of June. You may wonder what it will be at end of June next year. Whereas we are the financial advisers of government in terms of borrowing, we have no role after we have given our recommendations,” Dr Njoroge said.
Leave a comment