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Kenya

Shilling welcomes nominee CBK boss

MONEY-SHILLINGSNAIROBI, Kenya, Jun 4 – The money market appeared to express confidence in the nominated Central Bank of Kenya (CBK) Governor Patrick Njoroge, as it appeared to steady from the recent decline.

In an interview with Capital FM Business, Commercial Bank of Africa (CBA) Treasury Dealer John Njenga said since his nomination the shilling strengthened trading Thursday at Sh96.7 against Sh96.90 to the dollar.

“Dr. Patrick Njoroge’s nomination as the next governor of the CBK has been well received by the market as certainty and sanity was brought into the market, “Njenga said.

Senior Portfolio Manager at Pan Africa Asset Management Jonathan Wakahe says while it may be too early to anticipate Njoroge’s policy inclinations, the nomination in itself appears to have revived interest in the local stock market, as seen in yesterday’s strengthening of dollar inflows into equities.

READ: Uhuru nominates Patrick Njoroge New CBK Governor

Wakahe says a cursory analysis of some of the work Njoroge has been involved in during his stint at the IMF, suggests a strong leaning toward enhanced financial system supervision, and the market was keen to see what form this will take in his new appointment.

The Monetary Policing Committee meets on June 9, having been pushed forward by a full month.

“We are of the opinion that the Central Bank Rate (CBR), which is the key policy rate, could be raised by as much as 150 basis points, or 1.5 percentage points, to 10.0 percent from the current 8.5 percent, “said Wakahe.

The National Assembly has 14 days to approve the nominations of Patrick Ngugi Njoroge and seasoned lawyer Mohammed Nyaoga and as the new Governor and Chairman and Central Bank of Kenya respectively.

READ: MPs have 14 days to vet approve CBK nominees

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Meanwhile, Treasury Bills auction performance rate has dipped further ahead of Tuesdays MPC meeting.

“This week’s auction of the 182 and 364 day papers recorded performance rate of 6.7 percent, this the lowest performance rate recorded in recent history- prior to this week’s 6.7 percent, the lowest rate was 9.01 percent set in mid May 2015,” said Standard Investment Bank research.

Owing to the low performance rate 99.8 percent of offers received were accepted.

Both the 182 and 364 day rates remained unchanged at 10.5 percent and 10.8 percent respectively.

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