The Central Bank of Kenya is the government of Kenya’s banker, fiscal agent, and adviser to anything finance related.
It is a public institution mandated to formulate monetary policies to achieve and maintain price stability and issuing currency in the country. The Bank also formulates and implements foreign exchange policy as well as manage foreign exchange reserves.
It was established under Article 231 of the Constitution of Kenya, 2010, although originally formulated in 1966 through an Act of Parliament, the Central Bank of Kenya Act (1966) after the dissolution of East African Currency Board (EACB).
The EACB’s three East African member states; Kenya, Uganda, and Tanzania, all chose to have independent monetary and financial policies to drive their economies, hence, doing away with the regional bank which had been playing this role in the mid-1960s.
The Central Bank’s mandate is discharged through six core functions:
- Monetary Policy: The Central Bank collects and analyses economic and financial data and undertakes research in micro and macroeconomic activities to inform the formulation of monetary policy geared towards achieving and maintaining stability in the general level of prices.
- Financial Markets: To implement monetary policy decisions, the Central Bank employs financial tools at its disposal to foster liquidity in the financial market and manage the growth of credit in the economy. The Bank manages the country’s foreign exchange reserves and intervenes to mitigate unforeseen disruptions in order to ensure stability in the foreign exchange market. Furthermore, the Bank discharges its agency role to the National Treasury as it manages the Government’s domestic borrowing.
- Bank Supervision: The Central Bank provides the legal and regulatory framework and issues prudential guidelines to govern the operations of financial institutions under its mandate. It also licenses and undertakes surveillance of the financial institutions to ensure compliance with laws and regulations.
- Payment and Settlement Systems: Safe and efficient payment and settlement systems is a key component of an effective and efficient financial sector. The Bank formulates and implements such policies as best promote the establishment, regulation and supervision of efficient and effective payment, clearing and settlement systems that promote social and economic activities.
- Banking Services: The Central Bank provides banking services to government ministries, departments and agencies, semi-autonomous government institutions and county governments.
- Currency Services: The Central Bank is responsible for the design, production and distribution of the Kenya currency. The bank ensures that there is an adequate supply of clean currency to support social-economic activities.
Read Also: List of Banks in Kenya and their Addresses
Central Bank of Kenya Exchange Rates
The exchange rate released by the financial markets department of the Central Bank of Kenya is an indicative rate for use by the general public. This is meant to help those exchanging currencies gauge the value of the shilling on any given day.
It should be noted that the Central Bank does not set the exchange rate; it is determined by the market or supply and demand. However, individual forex bureaus and commercial banks set their own rates, which are held to reasonable levels of variance and margins due to competition in the market. Information about historical exchange rates is available here.
Central Bank Of Kenya Governance
A Board of Directors provides oversight of the Bank’s functions by formulating policies, other than the formulation of monetary policy, and reviewing performance
The Board comprises of eleven members, consisting of the Chairman, the Governor, the Permanent Secretary to the National Treasury and eight non-executive directors appointed by the President. The Bank’s Management team, however, includes just the Governor and two Deputy Governors and heads of department.
The Governor and Deputy Governors are appointed by the President through a transparent and competitive process and with the approval of Parliament. They each hold office for a term of four years but are eligible for re-appointment for one further term of four years.
The Governor is the chief executive officer of the Bank and, subject to the general policy decisions of the Board, is responsible for the management of the Bank, including the organisation, appointment and dismissal of the staff in accordance with the general terms and conditions of service established by the Board.
The current Governor of the Central Bank is Dr Patrick Njoroge (PhD) who was appointed in June 2015.
He holds a PhD in Economics from Yale University, USA, and a master’s and bachelor’s degrees in Economics from the University of Nairobi, Kenya.
Prior to joining the Central Bank, Dr Njoroge spent 20 years at the International Monetary Fund (IMF), in Washington, D.C., USA, where he rose to become an adviser to the IMF Deputy Managing Director from December 2012. Before joining the IMF, Dr Njoroge worked in Kenya as an economist at the Ministry of Finance and as a planning officer at the Ministry of Planning.
Central Bank Of Kenya Contact
Communication to the Central Bank of Kenya should be addressed to:
Address: Haile Selassie Avenue
Mailing Address: P.O Box 60000-00200, Nairobi, Kenya
Tel / Fax: +254202860000
Phone: +254202861000, +254202863000, +254709081000, +254709083000
Other Branches:
Head Office
Address: Haile Selassie Avenue, P.O. Box 60000-0200, Nairobi
Telephone: +254 20 2861000, +254 20 2860000, +254 20 286300, +254 20 340192
Telex: 22324
Mombasa
Address: Nkrumah Road, P.O. Box 86372, Mombasa
Telephone: +254 41 2121000, +254 41 222524
Telex: 21230
Kisumu
Address: Jomo Kenyatta Highway, P.O. Box 4, Kisumu
Telephone: +254 57 2050000, +254 57 45386
Telex: 31047
Eldoret
Address: Uganda Road, P.O. Box 2710, Eldoret
Telephone: +254 53 2033325/6-9, +254 53 2061052/2061212
Telex: 35005
Nyeri
Address: Kenya Commercial Bank Building, Kenyatta Street, P.O. Box 840 – 10100, Nyeri.
Telephone: +254 61 2030779, +254 61 2030780
Nakuru
Address: George Morara Street, P.O. Box 14094 – 20100, Nakuru
Telephone: +254 51 2210711, +254 51 2210713
Meru
Address: Co-operative Bank Building, Njuri Ncheke Street, P.O. Box 2171-60200, Meru
Visit the Central Bank’s website for more information.
