Kenya to reform central bank laws to ensure currency stability

Kenya to reform central bank laws to ensure currency stability

Kenya is reforming its laws in order to enhance the Central Bank of Kenya’s (CBK) role in ensuring currency stability, a senior government official said on Friday.

National Treasury Cabinet Secretary Henry Rotich told a media briefing in Nairobi that stakeholders are currently providing inputs to the proposed laws.

“The bill will soon be presented to parliament for debate, so that it is enacted,” Rotich said during the launch of the Central Bank of Kenya Golden Jubilee celebrations.

The bank opened its door in 1966, and began circulating the first generation of Kenyan currency notes.

Rotich said that the new law will align the functions of the bank with that of international best practice, adding that operational independence will lead to greater accountability to the financial sectors.

Through the proposed law, the government hopes to achieve further deepening of the financial markets, greater supervisory vigilance as well as increased market discipline.

The CS said that the proportion of currency outside banks has declined significantly, reflecting financial deepening and increased financial innovations.

CBK Governor Patrick Njoroge said that his organization will endeavor to promote transparency in credit pricing so as to improve the monetary policy transmission to the financial sector.

Njoroge said that the central bank is also promoting the development of government bonds market in Kenya, with the objective of lengthening the maturity profile of securities in the domestic debt portfolio.

“Through this initiative, the Central Bank in conjunction with the Treasury has so far successfully revitalized the government bond program and skewed the debt portfolio to the current ratio of 78 percent treasury bonds and 22 percent treasury bills,” he said. Enditem