Cen­tral Bank eyes more IMF cover

CBK boss says coun­try can­not af­ford to be caught of­f­guard by var­i­ous ex­ter­nal shocks

Business Daily (Kenya) - - FRONT PAGE - Pa­trick Alushula palushula@ke.na­tion­media.com

Kenya will still en­gage the In­ter­na­tional Mon­e­tary Fund (IMF) for a pre­cau­tion­ary fa­cil­ity de­spite the “ad­e­quate” 5.6 months im­port cover, Cen­tral Bank of Kenya has said..

Kenya will still en­gage the In­ter­na­tional Mon­e­tary Fund (IMF) for a pre­cau­tion­ary fa­cil­ity de­spite the “ad­e­quate” 5.6 months im­port cover, Cen­tral Bank of Kenya has said.

Cen­tral Bank of Kenya (CBK) gover­nor Pa­trick Njoroge said Nairobi will move care­fully with­out sac­ri­fic­ing the in­de­pen­dence of the apex bank, even as he de­scribed Kenya as a wor­thy mem­ber of IMF with re­la­tion­ship be­yond the lapsed pre­cau­tion­ary ar­range­ment.

“There is a very dy­namic re­la­tion­ship that you can­not just walk away from. There is no di-

vorce. We want to con­tinue with those en­gage­ments. Whether it will lead to a pre­cau­tion­ary ar­range­ment, that is for later,” the for­mer IMF of­fi­cial and co-sig­na­tory of Kenya\s agree­ment with the fund said.

“There is no feel­ing like we are un­der some­body’s con­trol. The is­sue of in­de­pen­dence of CBK from other ac­tors is also im­por­tant.”

In the ab­sence of the March 2016 IMF in­sur­ance that ex­pired re­cently, Dr Njoroge said he is bank­ing on the avail­able re­serves to help cush­ion the econ­omy from ex­ter­nal shocks.

Lat­est CBK data puts re­serves at $8.507 bil­lion (or Sh859.67 bil­lion) as at Septem­ber 20, be­ing an equiv­a­lent of 5.6 months im­port cover.

This is a com­fort­able posi­ton when com­pared to the min­i­mum tar­get of four months or East African Com­mu­nity’s bench­mark of 4.5 months, ac­cord­ing to the gover­nor. He said Kenya has weath­ered jit­ters in the global fi­nan­cial mar­kets, Brexit, in­ter­est in­creases in the ad­vanced economies and trade wars with­out draw­ing on the IMF fa­cil­ity.

— FILE

COVER CBK gover­nor Pa­trick Njoroge.

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