The Central Bank of Kenya (CBK) has moved to mop up excess dollars from the economy through the Open Markets Operations (OMO) to protect the shilling. The move, which saw CBK buy dollars from the market, was initiated after Treasury received a lot of inflows from external financiers, with some of the dollars percolating into the economy through the payment of pending bills and disbursements to counties. CBK Governor Patrick Njoroge, in a press briefing on Thursday, noted that there was a huge influx of liquidity as the State and counties paid pending bills. “In the first instance, for example, we were doing open market operations to ensure that it does not cause significant damage in the economy,” said Njoroge. OMO is one of the tools that CBK uses to control the supply of money in the economy to stabilise prices and achieve economic growth.

Source: Standard Digital July 30, 2021 21:00 UTC