CBK governor meets MPs over weak shilling

Central Bank of Kenya governor Njuguna Ndungu and members of the bank's monitoring policy committee appeared before a House team to explain the causes of the depreciating shilling and measures taken to address it Tuesday.

Speaking to journalists before the closed door meeting, the chairman of the parliamentary committee on Finance Nambale MP Chris Okemo said his team is interested in the nitty gritty of the weak shilling, high interest rates and inflation.

"We would like to know key fundamentals driving the issues," he said at Continental House, Nairobi.

The committee would also like to know the state of foreign reserves from the CBK governor, he said.

Mr Okemo said the cost of living has become unbearable for the ordinary Kenyan and asked the CBK to detail long and short term measures to address the issues so as to give hope to Kenyans.

Formulating monetary policies

Prof Ndungu was accompanied by MPC members Prof Terry Ryan, Sheila M’Mbijjewe, Prof Francis Mwega and Farida Abdul.

The committee helps CBK manage the country’s economy by formulating monetary policies.

The House team summoned Prof Ndungu on October 3.

The shilling weakened further on Monday to near a Sh104 low against the dollar.

Inflation has been steadily risen to hit 17.32 per cent in September against 5.42 per cent recorded in January 2011.

Last week, the CBK raised its indicative rate by four percentage points to 11 per cent in an effort to tighten monetary policy that would discourage borrowing from banks, check inflation and stabilise the currency.

Finance Committee members present included Mr Okemo, Lucas Chepkitony (Keiyo North), Shakeel Shabbir (Kisumu Town East) and Subukia MP Nelson Gaichuhie.