CBK boss grilled in House shilling probe

The Central Bank Governor on Tuesday survived a hyped censure from Parliament when he showed up for questioning by House committee investigating the rapid slide of the shilling.

At the hearing in County Hall, Mr Njuguna Ndung’u said sinking of the shilling was as a result of external shocks — high oil prices in the international market and food supply constraints. That, he said, accelerated the inflation rate.

The CBK boss came under fire from the MPs who sought to know his competence and the reasons for the supposedly slow intervention to end the crisis when it occurred in the last quarter of 2011.

However, he declined to name the banks that had been involved in any malpractice, or even the one that was fined Sh1 million, saying that such a move was dangerous to the business, but he committed to disclose it in a closed-door session. (READ: MPs blame CBK and banks for shilling fall)

The MPs tried to know how Mr Ndung’u landed at the helm of the CBK and what went wrong when the shilling began going south.

“We see a lot of fire-fighting from your side. You did not take action in good time. When you did, the damage was already done,” said Mr Benjamin Lang’at the Ainamoi MP.

Ms Rachel Shebesh — the vice chair of the committee, also sought to know why the Monetary Policy Committee comprised “outsiders,” and not CBK economists.

Mr Ndung’u said CBK has shut down some of the systems to stave off any malpractices by banks.