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Kenya Explores Central Bank Digital Currency

Kenya is exploring the use of central bank digital currency (CBDC) to settle cross-border payments according to the country’s Central Bank Governor Dr Patrick Njoroge. A Central bank digital currency (CBDC) is money that exists solely in electronic form, issued and regulated by the nation’s monetary authority and backed by the government. Speaking on the sidelines of the Afro-Asia Fintech festival which was held virtually, Dr Patrick Njoroge said that (CBDCs) can slash the time needed for...

Kenya Shilling hits losing Streak Against the U.S Dollar on Strong USD Demand

The Kenya Shilling has been on a losing streak against the U.S Dollar in what analysts and forex traders attribute to strong dollar demand especially from oil importers and weak inflows. Figures from the Central Bank of Kenya (CBK) shows that when trading at the forex markets opened on Friday, 5th November 2021, the Kenya Shilling was quoted at a mean rate of Kes111. 55 against the greenback. Kenya Shilling Depreciates Further  This is compared...

CBK Revokes License of Mobile Pay Limited as a Payment Service Provider

The Central Bank of Kenya (CBK) has revoked the authorisation granted to Mobile Pay Limited (MPL) which has the brand name Tangaza as a mobile Payments Service Provider (PSP). The regulator said the action culminates a long engagement between them and Mobile Pay Limited, during which they considered MPL’s continued violations of Nation Payment Systems law and regulations. Mobile Pay Limited has persistently failed to discharge its statutory obligations, among others, non-submission of audited annual...

China Accounts for 70% of Kenya’s Debt Says CBK

China has been named the leading bilateral lender to Kenya by the Central Bank of Kenya (CBK) accounting for 67% of its external debt followed by Japan(14%), France(7%) with other countries accounting for 11%. A new analysis of the composition of Kenya’s bilateral lenders by the Central Bank of Kenya (CBK) shows that China controlled less than one per cent of Kenya’s external debt portfolio in 2006. By June 2011, however, the Asian country was...

Kenya’s Forex Reserves Dip by 11.3 Billion as CBK Increases Dollar Liquidity

Forex exchange reserves dipped by over Kes. 11.3 billion after the Central Bank of Kenya (CBK) released more dollars into the market to cushion the Kenyan shilling. The banking regulator has however not given reasons for the huge drop but says reserves remain adequate and are within the statutory import cover of at least four months. According to the latest central bank weekly bulletin, the foreign exchange reserves fell to Kes. 977.1 billion from Kes....

Kenya Picks Citi, JP Morgan As Lead Underwriters for its Dollar Sovereign Bond

Kenya has appointed Citi and JP Morgan as joint book-runners for a dollar-denominated sovereign bond issue, and I&M Bank and NCBA Group as co-managers. Meetings with investors have already started over the bond, which will have a 12 to 15-year tenor. What the Dollar Sovereign bond means for Kenya The Ministry first announced plans for the $1 billion Eurobond in March 2021 and a separate 1-billion-euro bond. According to the National Treasury and Planning 2021...

Kenya’s Economy Set to Rebound 6.6% in 2021.

The Kenyan economy is expected to rebound to 6.6 percent in 2021 reinforced by the prevailing stable macroeconomic environment and the ongoing implementation of the strategic priorities of the Government under the “Big Four” Agenda and Economic Recovery Strategy. Speaking in Parliament during the 2021/2022 budget reading, Kenya’s Treasury Cabinet Secretary Ukur Yatani said,total expenditures in the FY 2021/22 budget are projected at Kes 3.03 trillion equivalent to 24.5 percent of GDP from Kes 2.89 trillion...

Kenya Set to Receive $750 Million Loan from the World Bank

Kenya expects to receive a loan of $750 million from the World Bank in the next two weeks to support its budget, the country’s central bank governor Patrick Njoroge said on Thursday. The funds are expected to fill a huge budget deficit as the Kenya budget cycle ends in June 2021. “There is a loan, the so-called DPO, of an amount of $750 million, which we expect over the next couple of weeks,”  Patrick Njoroge...

CBK to Supervise Digital Lenders Under New Bill

Digital mobile lenders will have six months to be licensed by the Central Bank of Kenya (CBK) if Parliament adopts a proposed law to see the regulator control their products, management, and sharing of borrowers’ information. The Bill tabled in Parliament by Gladys Wanga in her capacity as chair of the Committee on Finance, and National Planning said, “any person who before coming into force of this was in the business of offering credit facilities...

CBK accepts Kes 81.9 Billion from Bonds sale, 147.6% oversubscription

The Central Bank of Kenya (CBK) accepted bids worth Kes 81.94 Billion from the 18-year old April 2021 Infrastructure Bonds sale out of Kes 60 Billion that was on offer. At the auction dated 7th April 2021, the CBK received bids worth Kes 88.6 Billion, an oversubscription rate of 147.63%. Competitive bids amounted to Kes 75 Billion while Kes 6.9 Billion comprised Non-competitive bids that were accepted. CBK’S Offer to Investors The coupon rate for this...

IMF Approves $2.34 Billion Loan Facility for Kenya

The Executive Board of the International Monetary Fund (IMF) approved 38-month arrangements under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) for Kenya in an amount equivalent to SDR 1.655 billion (305 percent of quota or about US$2.34 billion) to support the next phase of the authorities’ COVID-19 response and address the urgent need to reduce debt vulnerabilities. Approval of the ECF/EFF enables immediate disbursement of about US$307.5 million, usable for budget...

Diamond Trust Bank Posts 51% Drop in Earnings at Kes 3.5 Billion

Diamond Trust Bank’s (DTB) net profit for the year that ended on 31st December 2020 dipped by 51% to Kes3.5 billion, from Kes7.3 billion in 2019. According to the lender, higher loan loss provisions due to the elevated credit risk led to the steep decline in the full-year net profit. Diamond Trust Bank (DTB) total assets crossed the Kes 400 billion threshold for the first time, rising by 10% to Kes 425 billion at the...

CBK Extends Loan Term Repayment by 3 Months

The Central Bank of Kenya (CBK) on Tuesday announced the extension of the loan repayment measures put in place for bank customers whose loans were performing before 2nd March 2020, which had lapsed earlier in the month for another three months to 3rd June 2021. This means, lenders have until then to regularize their loan repayments following the expiry of a one-year window through which the lenders had extended and restructured the loan repayments for...

Kenya to Raise Debt Ceiling Above Kes 9 trillion Mark

Kenya is expected to raise its debt ceiling of kes 9 trillion to accommodate growing expenditure needs amid underperforming tax collections. The National Treasury said the discussion was in the background as the public debt stock was fast approaching Kes 9 trillion’s statutory ceiling set out in the Public Finance Management Act, 2012. “As a result, the implementation of this strategy may require the revision of the debt ceiling through the amendment of the PFM...

Kenya Seeks to Raise Kes 248.1 Billion in Sovereign Debt

Kenya’s treasury aims to raise Kes 123.8 billion from sovereign bonds sold to foreigners in the next four months and an additional Kes 124.3 billion during the fiscal year starting in July to help finance the budget. In a medium-term debt management document submitted to the National Assembly, the Treasury said Commercial foreign loans will be limited to financing projects with high returns. It is tilting away from high-interest domestic borrowing to maximize concessional and...

IMF & Kenya Reach Staff Level Agreement on Kes 262.7 billion Loan

The International Monetary Fund (IMF) on Monday said it will soon disburse Kes 262.69 billion (USD 2.4 billion) to the Government of Kenya after it’s staff virtual visit and the Kenya treasury reached an agreement on a 38-month financial package. The IMF said that its team and the Kenyan officials reached an agreement on a 38-month program to help the next phase of the country’s COVID-19 response and a strong multi-year effort to stabilize and...

Banks Pre-tax Earnings Decline by 28.2%; Lowest Since 2012

Banks have posted the lowest 11-month pre-tax earnings for the banking sector since 2012. The low profits were attributed to the massive disruption of Covid-19 to the industry recording high profits. A report by The Central Bank of Kenya (CBK) shows that the pre-tax earnings in the period ended November 2020 declined by 28.2% to Kes 107.7 billion from Kes 150.1 billion posted during the same period in 2019. The decline in profits has come...

Central Bank of Kenya Retains Benchmark Lending Rate at 7 Percent

The Central Bank of Kenya (CBK) Monetary Policy Committee (MPC) on Wednesday kept the benchmark rate unchanged at 7% in its sixth consecutive sitting amid concerns of slight rise in the cost of basic food items and services in coming months as a result of tax measures introduced on 1st January 2021. While signaling rebound in economic growth this year after a 0.6% contraction last year due to COVID-19, MPC says the rate retention stems...

October Diaspora Remittance Grow 17.3 Per Cent to Kes. 28.4 Billion

Kenyans abroad sent home a record Kes. 28.4 billion ($263.1 million) in October this year, a 17.3% increase compared to the same period last year when inflows for the month stood at Kes. 22.4 billion ($224.3 million) Data from the Central Bank of Kenya further indicate that cumulative inflows in 12 months ending October 2020 totaled Kes 324.6 billion outpacing last year’s performance when remittances amounted to Kes. 292.7 billion. Remittance inflows have continued to...

Kenya Ranked 7th Position in the Absa Africa Financial Markets Index 2020

The fourth edition of Absa Africa Financial Markets Index 2020 show Kenya has dropped four places. The  index that  measures the capacity of countries to attract both  local and foreign investments, shows that Kenya  has lost seven points to score 58 out of 100 points hence placing it at the seventh position. The countries that were ahead of kenya were South Africa and Mauritius which scored 89 and 79 points respectively followed by Nigeria,Botswana,Namibia and...

Fitch Says Kenya’s COVID-19 Measures Will Lead to Faster Increase in Debt

Fitch expects Kenya's general government debt to continue rising through FY22 to reach about 70% of GDP. This is higher than our pre-coronavirus forecasts, which saw debt peaking at 65% of GDP. As domestic Treasury auctions are typically undersold, much of the increased borrowing in FY21 and FY22 will have to come from external sources, leading to an increase in Kenya's external debt, which is already high compared with 'B' rated peers.

Safaricom waives M-Pesa fees gets Regulator nod to lift Transaction Limits

Kenya’s largest telecoms operator Safaricom said on Monday it will waive transaction costs on mobile money transfers under Kes 1,000 shillings after President Uhuru Kenyatta encouraged the use of cashless payments to curb the spread of the coronavirus since it would cut down on the handling of cash. The M-Pesa mobile money platform is widely used, with more than 20 million subscribers in a population of 47 million. The Central Bank of Kenya has also approved...

Morning Note: Where’s that Bull?

1. Global Markets soared yesterday for the first time in two weeks as China reported lower cases of the Corona Virus infection.The S&P 500 surged 4.6% Monday, rebounding from the worst week for stocks since the financial crisis of 2008. 2. The Nairobi Securities Exchange major indices had a major boost as foreign activities on the market rose, foreigners are taking positions for Dividend considerations strategy & capital gains considering the favourable price range of...

The Rate Cap is here to Stay!

Kenyan parliamentary committee has rejected a request from the finance ministry to scrap the cap on commercial interest rates imposed by lawmakers in 2016, a document seen by Reuters on Wednesday showed. The Finance and National Planning Committee instead recommended that the law capping lending rates be rewritten more clearly. The finance ministry had asked in June for the cap to be dropped, arguing that it had constricted private sector credit as banks shunned lending...

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