The Central Bank of Kenya (CBK) notes with concern the misconceptions and errors that have appeared recently in the media with respect to the issuance and settlement of funds from the Kenya Government Eurobond. CBK wishes to enlighten the public on this matter by providing the following clarifications.
There are three main types of foreign currency transactions that the CBK undertakes as banker to the Government, upon instruction and verification:
1. On behalf of the Government, CBK can pay an external party using the resources in the Government’s foreign currency account.
2. On behalf of the Government, CBK can transfer resources from the Government’s foreign currency account to its Kenya Shilling account at the CBK. To do this, CBK buys the foreign currency at the prevailing exchange rate and credits the Government’s Kenya Shilling account with that amount.
3. The Government can also make available Kenya Shillings in its accounts and request CBK to pay a designated beneficiary the equivalent amount in foreign currency. Read More