The Central Bank of Kenya has refuted claims made by Deputy President Rigathi Gachagua that it did not have enough foreign currency for oil importers.
According to the regulator, oil importers get the necessary foreign currency via commercial banks, just like all other private transactions.
“Commercial banks provide all foreign exchange for individual transactions. In a statement outlining their position on the subject,” CBK stated adding that they do not supply foreign exchange for transactions other than for the National Government or CBK operations.
According to Gachagua’s interview with a local media house, the country’s financial condition is so dire that it lacks the foreign exchange reserves necessary to import oil.
“We need foreign exchange, and the Central Bank lacks sufficient foreign currency to acquire petroleum,” said the DP.
Despite getting payment from the government through the subsidy scheme, oil marketers have expressed anxiety about losing money.
Some oil marketers argued that the Energy and Regulatory Authority’s (EPRA) remuneration for subsidy payments was based on the officially published dollar exchange rate, placing them at risk of losses.
The government was subsidising petrol at a rate of Sh7.65 billion on average each month, underscoring the detrimental effect the subsidy was having on the nation’s tax earnings.
One of the requirements from the IMF under a Sh270.2 billion ($2.34 billion) financial support plan that will last for 38 months is the removal of the subsidy.
However, CBK insisted in their statement that, in accordance with the laws governing their activities, they continue to provide enough cover and a buffer against shocks in the foreign exchange market.