NAIROBI, Kenya, May 30 – Central Bank of Kenya (CBK) Governor nominee Kamau Thugge is proposing the issuance of locally sold dollar denominated bond with the government offering good rate to aid liquidity.
He noted that the government wants to Kenyans an incentive to stop stockpiling dollars in bank and release the money into the economy.
During his vetting before the Finance and Planning Committee, Thugge who cited media reports stated that Sh1 trillion had been deposited in the local banks in the form of foreign currency at a time when the country is facing a dollar shortage.
The shilling has been depreciating to the dollar currency which has been attributed to the global recession which has been precipitated by the ongoing Russia-Ukraine War and the aftermath of the COVID-19 pandemic.
“I am looking at the possibility of issuance of dollar denominated bond the way we issue infrastructure bond. We structure it and issue locally and offer better rate that we will have the possibility of increasing liquidity in the system,” Thugge stated.
The Former Treasury Principal Secretary told MPs that once approved as CBK governor he will ensure there’s more consultations with the banking sector to tap on the foreign currency deposited in the industry.
“The foreign currency deposit has reached at least Sh 1 trillion. We may need to see what is not happening in the foreign exchange market that is making Kenyans to hoard the deposit in dollars and not in Kenyan currency,” Thugge stated.
President William Ruto’s administration put in place a short measure of reducing the dollar shortage crisis through government-to-government importation that is estimated to reduce the demand by 500 Million dollars.
Thugge however dispelled the notion explaining that the measure undertaken by the government has managed to ensure the situation doesn’t worsen despite the narrow margin.
“I would not look at it that way because the fact is that exchange has removed the demand by 500 million dollars per month. Had we not had that deal then the exchange rate would have moved so badly,” he said.
The adept economist told the Finance Commitee that his net worth is Sh450 million which includes properties in Mombasa, a plot of land in Ridgeways, Kiambu Road and in Thika Greens.
President William Ruto nominated him on May 15, following the imminent retirement of Patrick Njoroge, whose two terms end next month.
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