The Nominated Central Bank of Kenya governor, Dr. Kamau Thugge intends to float a local dollar-denominated bond so as to prompt rich Kenyans holding more than Ksh1 trillion in deposits to release the money in order to relieve pressure on the Kenya Shilling.
He said that together with the National Treasury, they will try to issue the dollar bond with inviting profits that will cause rich locals to release their fixed deposit accounts in local commercial banks.
“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 liquidity of dollars in the system and this will help us in building up foreign exchange reserves at the CBK,” said Dr. Thugge.
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He added that CBK and the Treasury will motivate Kenyans in the diaspora to invest in the dollar bond as a means of increasing inflows into the country while appearing before the National Assembly’s Finance and Planning Committee.
According to the CBK data, foreign currency bank deposits had a high of Ksh1.06 trillion in March. This was a move by some individuals and big companies seeking a safe place for their wealth.
“These are the things I would like to do as soon as I get into that office. We will sell the dollar denominated bonds locally like Treasury Bonds and Bills so that the government offers a good rate of return. This will cause availability of dollars in the local financial systems, “ he said to the panel during vetting.
He also talked about the need to strengthen lenders through mergers and acquisitions due to the fact that Kenya has both strong and weak commercial banks.”
“In 2013, we proposed to have aa more resilient financial sector by reducing small weak banks and have them merge with strong ones…if I become CBK governor, this is one area I will pursue in order to have strong banks that have liquidity buffers that can expand in the region and lower interest rates as they compete with one another,” he said.
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Dr. Thugge also said that he was wrongly charged over Ksh63 billion Arror-Kimwarer dams scandal after he put his net worth at Ksh450 million.
