NAIROBI, Kenya, Jun 6 – President Uhuru Kenyatta has extended Patrick Njoroge’s term as the Central Bank Kenya governor for a period of four years with effect from 18th June 2019.
This comes a few days later after the governor launched new currency notes that have so far witnessed EALA MP Simon Mbugua and activist Okiya Omtata file a petition challenging the issuance of the new currency notes.
In a statement to newsrooms, the President has also reappointed CBK’s Deputy Governor Sheila M’Mbijjewe for another four years.
Initially, the governors and his deputy’s succession exit heightened fears of a clear transition crisis at CBK, which is the body expected to formulate and implement monetary policy that promotes price stability, fosters liquidity, solvency, and stability of the banking sector.
During his first four-year term, the country witnessed the collapse of three banks, starting with Dubai Bank in August 2015, which came a few months later after his appointment, Imperial bank in October 2015 and Chase Bank in April Bank 2016.
This was majorly focused to stick within the banking rules under the Yale-trained economist’s rule.
He also experienced challenges with members of the 12th Parliament regarding some of the banking sector regulations which was limiting daily cash transactions claiming it was hurting the country’s economy.
The former International Monetary Fund advisor was further accused of coming up with regulations without seeking and waiting for feedback from the members of parliament.
Assessing his four-year span, the country’s inflation has remained stable at 6.2 percent which is within the government’s target band of 2.5-7.5 percent.
The shilling has also remained stable at an average of Sh101.97 to the US dollar over the period.
The banks also started rationing credit to small businesses with the representation of a rule that controls lending rates to not more than four percent points above the Central Bank Rate.
The measure has since witnessed banks lending to private businesses and individuals at more than 20 percent interest has had the effect of stifling the flow of credit market where banks became more cautious in their lending.
However, the private sector credit rose by just 3.4 percent in February that is below CBK’s target rate of 12-15 percent needed to boost economic development.
In December 2018, CBK introduced new coins that have been designed in accordance with the 2010 constitution.
Recently, the CBK monk launched new currency notes said to curb fraud that has hit the country in the past months.
The governor is also focused to enforce laws on Credit Reference Bureaus and online money lenders who have been accused of frustrating Kenyans.