Kamau Thugge: CBK Governor ascertains shilling stability
Speaking to Reuters on the sidelines during the annual meeting of the International Monetary Fund and the World Bank in Washington, Thugge revealed that Kenya’s inflation rate will drop below 3. 6 percent. of the year as recently recorded.
The government will continue to work towards strengthening the shilling by keeping its foreign reserves strong, as announced by Thugge.
According to him, the government’s foreign reserves are sufficient to cover the shilling in foreign currencies for 4 to 3 months., and this will ensure that the currency remains stable against the dollar in the near future.
He stated that the shilling is at a favorable level after the worldwide expansion this year, and officials are willing to utilize their unprecedented foreign exchange reserves to safeguard the currency. n Kenya’s foreign exchange reserves are now Ksh 1. 1 trillion ($8. 6 billion). which represents 4. 3 months for importation.
At the same time, the shilling will continue to perform well in foreign exchange markets, especially against the dollar, which has a 21 percent gain.
The continued strength of the shilling has made it one of the world’s best performing currencies this year, trading at Ksh 129 to the dollar. The shilling was down from Ksh 160 at the start of 2024.
The governor also said the government would lower interest rates following similar cuts imposed on banks to comply place Kenyans at affordable rates.
“Everyone wants interest rates to come down,” Thugge told Reuters.
On the expansion of Kenya’s financial aid from the International Monetary Fund, the CBK chairman said that Kenya has met all the targets set by the IMF by renewing the credit program.
“We got everything we needed to complete the review. Obviously the targets are still there for December after the review,” he added.
“Depending on the balance of costs and needs, depending on the ambition of the reforms we agree to, but we will maintain our relationship with the International Monetary Fund. “
A staff-level agreement for the 7th and 8th consolidated review of the Kenya project will be submitted to the IMF Executive Board for signature on October 30, resulting to a cost of Ksh78. 7 million. billion dollars ($611 million).
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