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Tag: shilling

  • CBK announces release of updated banknotes

    CBK announces release of updated banknotes

    The Central Bank of Kenya (CBK) has embarked on plans to release new banknotes into circulation to replace the 2019 series.

    The regulator says the new release will affect the Ksh 50, Ksh 100, Ksh 200, Ksh 500 and Ksh 1000 banknotes.

    According to CBK, the new notes will bear the signature of CBK Dr. Kamau Thugge who succeeded Dr Patrick Njoroge whose signature appears in current notes in circulation.

    The rest of the features remain the same as those of the series issued in 2019. All banknotes currently in circulation remain legal tender and will circulate alongside the released banknotes,” said CBK in a statement.

    The new notes will also bear the signature of the National Treasury Principal Secretary Dr Chris Kiptoo, the year of print – 20204 and a new security threads with colour changing effects that are specific to each denomination.

    “Release of the banknotes will commence with KES 1,000, while
    other denominations will progressively follow in the coming months,” said the regulator.

  • CBK defends Ksh 14B new banknotes printing deal

    CBK defends Ksh 14B new banknotes printing deal

    Central Bank of Kenya (CBK) says printing of the new notes will cost tax payers Ksh 14 billion over the next five years.

    CBK Governor Kamau Thuge told the national assembly finance committee that the tender was awarded to a Germany printing firm after consultations with the National Security Council.

    while appearing before the National Assembly Finance Committee CBK Governor Kamau Thuge told parliament the classified procurement process was single sourced and done in accordance with the law.

    CBK absolved itself from De la Rue’s exit from the Kenyan market saying the decision was solely made by the printing firm.

    Treasury is now expected to appear before the national parliament to explain the fate of the 40pc shareholding that government had acquired at De la Rue.

  • CBK expects strong shilling run to continue

    CBK expects strong shilling run to continue

    The Central Bank of Kenya (CBK) says the country’s debt has dropped by Ksh 1 trillion on account of strong shilling and investor optimism.

    According to CBK Governor Dr Kamau Thuge, the Kenyan currency has gained more value over the US dollar after the country managed to offset the $1.5 billion Eurobond debts in February.

    A combination of feeble shilling and worsening balance of payment created a cocktail of crisis in Kenya’s fiscal space increasing overall public debt by Ksh 1.93 trillion as of December 2023.

    This saw the total stock of public debt jump to record levels of Ksh 11.1 trillion, raising concerns over the country’s debt sustainability.

    However, investor nerves were calmed in January when the government settled the Eurobond debt that was due on February, 10.

    This has managed to stem a steady slide of the Kenyan shilling, which was trading at 160.1 against the US dollar.

    Dr Thugge says the Kenya shilling is now trading at 130, and the regulator expects the local currency to continue with its value correction in the coming weeks.

    Thursday, the shilling closed the trading day at 131 against the Dollar.

    The CBK governor is also raising concerns over the rise in non-performing which has breached the 15pc mark, for first time in over a decade.

    Banks have seen a surge in bad loans due to the economic meltdown.

    The governor noted that Kenya expects a disbursement of $1 billion  from the International Monetary Fund (IMF) to boost foreign reserves, which stands at 3.77 months of import cover.

  • CBK backs inflation, shilling stability to deliver 5.7pc growth

    CBK backs inflation, shilling stability to deliver 5.7pc growth

    The Central Bank of Kenya (CBK) projects the economy to register a 5.7pc growth this year on the backdrop of higher output from agriculture and services sectors.

    CBK Governor Dr Kamu Thugge in a post Monetary Policy Committee (MPC) on Wednesday said key to delivering growth this year will be pegged on ensuring stability in foreign exchange market and inflation in order to have a stable macroeconomic environment to encourage both domestic and foreign investments.

    Inflation rate rose to 6.9pc in January from 6.6pc in December on account of rising food prices and higher energy cost.

    In its first sitting of the year on Tuesday, the MPC hiked the Central Bank Rate (CBR) by 50 basis points to 13pc which is expected to result to higher borrowing costs for consumers.

    “The proposed action will ensure that inflationary expectations remain anchored, while setting inflation on a firm downward path towards the 5pc mid-point of the target range, as well as addressing residual pressures on the exchange rate,” said Dr Thugge.

    The shilling has been on a free fall against major currencies, depreciating by more at least 20pc against the US dollar. CBK bets on the upward movement of the benchmark rate to strengthen the exchange rate.

    “CBK policy on the exchange rate is to allow the foreign exchange market to be determined by market forces. However we do intervene when we see that there is excessive volatility. It is my view that the foreign exchange has overshot the equilibrium rate so there could be scope for CBK to support the FX going forward,” he stated.

    According to Dr Thugge, the shilling is expected to stabilize by end of April this year with new dollar inflows from multilateral lenders and increased interests by foreign investors in government securities.

    A new funding to the tune of $1.5 billion from the World Bank in the second quarter of this year will add to $684 million and $400 million the country has received from the International Monetary Fund (IMF) and Trade Development Bank (TDB) respectively, which has further strengthened the country’s reserves.

    “We are in the process of issuing the infrastructure bond and we have seen significant foreign interest in purchasing the infrastructure bond and therefore we expected foreign exchange to come in from the purchase of the bond,” added Dr Thugge.

    CBK projects a 5.7pc GDP growth this year from 5.6pc estimates for 2023 backed by stronger growth in Agriculture, Wholesale and Retail, Accommodation and expected recovery in transport and storage as the exchange rate stabilizes and fuel prices ease.

    Additionally, the regulator projects the ongoing implementation of key government programmes this year to support value addition in manufacturing which could push growth of the sector from 1.9pc last year to 2.9pc.