Kenyan Central Bank Rejects Deputy President Rigathi Gachagua’s Claims Country Lacks Forex to Import Oil – Africa Bitcoin News

The Central Bank of Kenya appeared to rebuke the country’s new deputy president Rigathi Gachagua, after it rejected the latter’s claims the East African nation lacks enough foreign exchange to import oil. The bank claims that all foreign currency used for private transactions as well as oil imports comes from commercial banks.

Central Bank only sources forex for government

The Kenyan central bank has pushed back against remarks made by the country’s deputy president Rigathi Gachagua which implied the East African nation lacks foreign exchange reserves to import fuel. The following is an article. statement, the bank said it “does not supply foreign exchange for transactions other than for the national government.”

All foreign exchange that is used in private transactions or for imports of oil comes from commercial banks, according to the bank. This has been the case since the complete liberalization of the foreign exchange market in the 1990s, the bank’s statement added.

In addition, the Central Bank of Kenya (CBK) insisted that it is mandated to adhere to the requirements of the country’s central bank act. The law, also known as the Central Bank of Kenya Act 26 (26), requires that:

[The CBK] at all times use its best endeavours to maintain a reserve of external assets at an aggregate amount of no less than the value of four months’ imports as recorded and averaged for the last three preceding years.

Kenya’s Bleak Prospects

According to the CBK, Kenya’s import cover stood at 4.64 months as of September 26, 2022. According to the CBK statement, foreign exchange reserves of $7.42 billion were available as of September 29th 2022.

In an interview with Citizen Digital, Gachagua, who was recently sworn in as Kenya’s deputy president, said Kenya’s economic prospects were dim. Gachagua stated that the current government had to stop fuel subsidies because of the country’s dire economic situation. Gachagua added that President William Ruto’s government is going to prioritize increasing food production.

However, in its statement that dismisses Gachagua’s claims, the CBK insisted that it will “continue to provide adequate cover and a buffer against shocks in the foreign exchange market.”

Register here for a weekly email update with African news.

Let us know your opinions on the story. Comment below and let us know how you feel.

Terence Zimwara

Terence Zimwara was a Zimbabwe award-winning journalist and writer. His writings have covered the economic problems of several African countries and how digital currency can offer an escape route.