• Signing of Credit Agreement Worth Sh 1.2 billion
  • Signing of Credit Agreement Worth Sh 1.2 billion
  • Signing of Credit Agreement Worth Sh 1.2 billion
  • M-Akiba Retail Bond Inaugural Launch
  • M-Akiba Retail Bond Inaugural Launch
  • M-Akiba Retail Bond Inaugural Launch
  • M-Akiba Retail Bond Inaugural Launch

Treasury News

Analysis: How To Achieve Effective Public Participation

The 2010 constitution requires public participation in key decision-making processes. However, progress towards this goal has been slow. Participation is costly and difficult to manage, especially in a country that is large and ethnically diverse.
Recently, the Kenyan government organized a conference on County Own Source Revenue Enhancement which was held at Great Rift Valley Lodge and Golf Resort, Naivasha.


Shilling firms against the US dollar

Treasury, October 6, 2015: By Joseph Kipkoech
The shilling has strengthened with support by rising yields on government securities and dollar sales by tea agencies paying to farmers.
At 8.42 am on Friday last week, banks quoted the shilling at 104.15/25 to the dollar, compared with Thursday’s close of 104.40/50.
Traders say a shortage of shilling liquidity has supported the shilling and kept overnight lending rate high at around 27 per cent this week up from 13 per cent in early September.


Central Bank seeks to clamp down on rogue forex dealers

Treasury, October 6, 2015: By Joseph Kipkoech
The Central Bank of Kenya (CBK) seeks to weed out dealers manipulating markets in an effort to stem volatility of the shilling.
The CBK governor, Dr Patrick Njoroge, said financial institutions ought to adhere to rules on forex trading and increase oversight on dealers to eliminate market indiscipline.


Video - Courtesy of KTN


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High interest rates and impact on the cost of living as companies and the public react to changes effected by banks, with the shilling tumbling to 103.71 last month before rebounding to Sh101.1 against the dollar on Wednesday could pose threat to economic growth.
Coming at a time when the country is facing a slow economic expansion and borrowing costs have hit a two-year high, Central Bank’s efforts to stem the shilling’s slide by intervening in the foreign exchange market and mopping up liquidity has not had the desired effect.

When banks hike lending rate, it signals difficulties for companies and individuals currently servicing loans, leading to a significant change in growth projections as plans based on old interest rates are revised.
Those planning to start businesses and invest in additional funds following the revisions need to take into account new rates, and investors who had planned to expand facilities by importing machinery must align their costs to the new regime.
Interest rates, just like fuel and energy, normally have an impact on all strata of the economy. The revision in interest rates has a knock-on effect on the economy and could lead to less investment as people shy away from “expensive capital” inputs-the effect, if widespread, could lead to a higher inflation as investment funds become more costly.
Analysts say companies are now working towards doing more with less by becoming more efficient in energy use and reducing wastage.
They say the liquidity problem needs to be managed by the Central Bank, the National Treasury and the government in general who must reduce the current account deficit by increasing exports while managing expenditure and receipts.