The Central Bank of Kenya (CBK) Governor Patrick Njoroge has said that the dollar bond will not mop up excess American currencies.
While hosting the post-monetary policy committee (MPC) in Nairobi, Njoroge stated that the issuance of dollar-denominated bonds will have little impact since there are no excess greenbacks.
“So what would a dollar denominated bond do? Actually in this space it wouldn’t get any more. It wouldn’t in a sense mop up those excess dollars because there are no excess dollars in that sense. It is only beneficial to the extent that it attracts new dollars from the rest of the world.”
The statement comes after CBK Governor nominee Kamau Thugge told a Parliamentary vetting committee in Nairobi yesterday that he will float a dollar-denominated bond to attract Kenyans holding over Kes1 trillion dollars to ease pressure on local currency.
He said that Raising dollars will cushion the Kenyan currency from sustained pressure from its American counterpart.
To achieve this, he said he will work with the National Treasury to offer attractive returns for holders.
“I will work with the National Treasury on the possibility of issuing a dollar-denominated bond and bills,” Thugge said.
“If we can get Kenyans holding dollars in deposit accounts to release them by buying into the bond, then we will have the possibility of increasing the liquidity of dollars in the system, which will help us build up foreign exchange reserves at the CBK."
