Central Bank in the spotlight as lenders run out of dollars
Outgoing Central Bank of Kenya Governor Patrick Njoroge.
Commercial banks are running out of dollars on some days following a shortage of the US currency, making it difficult for manufacturers and general goods importers to meet their obligations.
The Central Bank of Kenya (CBK) has directed commercial banks to ration dollars following a shortage of the currency and the race to protect reserves.
A number of currency traders and importers say banks have imposed a daily cap on dollar purchases of as little as $5,000 as firms struggle to obtain adequate forex to meet their supply needs.
This has forced industrialists to start seeking dollars daily and from several lenders for their monthly hard currency needs as the shortage puts a strain on supplier relations and the ability to negotiate favourable prices in spot markets.
Having banks, including the top tier lenders, run out of the greenback suggests an escalation of the currency woes that started mid-last year with lenders rationing scarce dollars.
“We are now scavenging for dollars. Only half of every six banks we call daily for dollars will have something for us. Three of the banks will ask us to check later,” said a top executive of a manufacturing firm who sought anonymity for fear of reprisals from the Central Bank of Kenya (CBK).
“What is available at banks is between $5,000 and $10,000. One will be fortunate to get $20,000 and extremely lucky to get $50,000 from a single bank. This is crazy for a business that requires $1 million monthly for supplies and we are getting each dollar at Sh137,” he added.
Importers say they cannot access the dollar at the official buy rate of Sh127.39, forcing them to buy at a rate of Sh137 or higher.
Read the full story here.
