On 10th June 2022, the KEPSA CEO Ms. Carole Kariuki met with Dr. Patrick Njoroge – Central Bank of Kenya (CBK) Governor at the Governor’s office. The Governor appreciated KEPSA for being proactive to meet members from all sectors including financial sector two days prior to the meeting.
The following are the outcomes of the meeting:
1. There was an appreciation that nothing is perfect and especially not now. The Governor who meets with the banks on a regular basis committed to meeting with the banks soonest on the issue of access to forex so all players in the market can have equal access.
2. There are global pressures including oil prices, the Ukraine war and the COVID-19 pandemic that have led to some outcomes locally, and therefore going forward information will cover these too and any effects they cause in the market.
3. There are also the seasonal factors like elections, drought in some parts of the country, dividends payouts which are now done that too have had pressure in the market.
4. There is a rise in demands for forex with increased imports after COVID-19.
5. Sometimes the global pressures are not well understood and they lead to some agitation by some players. The financial markets are very sensitive to agitation globally and so it’s important not to agitate despite any crisis by a company or sector or all, and use all available channels of business associations to the highest level to resolve any matter. Markets will work more effectively when not frightened.
6. That in Kenya there are no CBK rates and bank rates. CBK picks the average that comes from the banks after trading and posts it for the public. The exchange rate is market-determined. CBK intervenes only to avoid volatility when very necessary.
7. CBK wouldn’t allow trading of forex outside the rules E.g “willing seller, willing buyer” because of unintended consequences, or money laundering which we have seen before in the economy.
8. Most big businesses have a good relationship with their banks and urged small businesses to do the same. Shopping for the best prices can work once but not always and long term.
9. The markets sometimes get hijacked by some players and therefore CBK will continue to monitor this to ensure it doesn’t happen especially now when there are other local and foreign pressures.
For reference and more details, you can visit the CBK website ( https://www.centralbank.go.ke/ ).