CBK censures Rigathi Gachagua for claiming there is no forex to import oil

The Central Bank of Kenya (CBK) has censured Deputy President Rigathi Gachagua over his remarks regarding the availability of foreign exchange at the bank for the importation of fuel.

Gachagua on Saturday during an interview with a local TV station said that Kenya’s financial situation is awful to the extent that the country does not have enough foreign exchange reserves to import oil.

However, CBK issued a statement on Sunday clarifying that oil importers get their requisite foreign exchange from the commercial banks and CBK it does not supply foreign exchange for transactions other than for the national Government or its own operations.

“The Central Bank of Kenya (CBK) notes the comments by the Deputy President, His Excellency Rigathi Gachagua, in an interview on Citizen Television (Kenya) on October 2, 2022, CBK would like to provide the correct position regarding where oil importers obtain the requisite foreign exchange, and about the adequacy of CBK's foreign exchange cover,” the statement partly read.

“First, following the complete liberalization of the foreign exchange market in the 1990's, all foreign exchange for private transactions is obtained from commercial banks. CBK does not supply foreign exchange for transactions other than for the National Government (ie., government's own imports or debt service payments) or CBK's operations. Oil importers, therefore, obtain their requisite foreign exchange from the commercial banks and not CBK.”

CBK also affirmed its foreign exchange cover is adequate amid speculation that the reserve has run dry.

“Second, CBK's foreign exchange cover remains adequate,” CBK said.

“The CBK foreign exchange reserves, therefore, continue to provide adequate cover and a buffer against shocks in the foreign exchange market.”