Central Bank of Kenya (CBK) Governor Dr. Kamau Thugge has dismissed allegations of currency manipulation, attributing the Kenyan shilling’s recent stability to targeted policy interventions and prudent monetary management.
Speaking during a press briefing, Dr. Thugge emphasized that the shilling’s performance — which has averaged Ksh 129 to the US dollar in recent months — is a reflection of improved economic fundamentals rather than artificial support.“Our targeted policy measures, coupled with a stronger balance of payments, have significantly contributed to the stabilization of the exchange rate,” said Dr. Thugge.
The Governor highlighted a 13 percent growth in exports, increased travel receipts, narrowing of the current account deficit, and rising capital inflows as key drivers behind the currency’s resilience amid global market volatility.
Addressing external trade developments, Dr. Thugge downplayed the likely impact of a newly imposed 10 percent reciprocal tariff by the United States, noting that while Kenya’s exports to the U.S. are expected to decline by nearly $100 million, the overall economic effect will be minimal.On the domestic front, the Governor raised concern over the rising level of non-performing loans (NPLs), which have reached 17.2 percent.
He urged commercial banks to ramp up lending to the private sector as interest rates begin to ease, adding that the government’s efforts to clear pending bills in the construction sector are expected to help reduce the NPL burden.
Moreover the Governor confirmed that talks with the International Monetary Fund (IMF) on a new loan facility are at an advanced stage.In terms of regulatory oversight, the CBK has completed onsite inspections of risk-based pricing models at 13 out of 38 banks, with the process expected to conclude by the end of June.
Additionally, 22 of the 24 banks directed to submit capital-raising plans have already complied. The remaining two, subsidiaries of foreign institutions, have been granted more time to finalize their submissions.
