Central Bank of Kenya (CBK)
The Central Bank Of Kenya (CBK) is the central bank of the Republic of Kenya. It was established in 1966 and is responsible for formulating monetary policy, issuing currency notes and coins, managing foreign exchange reserves, promoting financial stability and supervision over the banking sector in Kenya.
History
The Central Bank Of Kenya Act was enacted by Parliament on 30th August 1966 to establish a central bank through which it could effectively exercise its own control over money supplies as well as other general banking services within the country. Since then, CBK has been actively involved in setting up guidelines that govern both domestic and international transactions within the Kenyan economy.
Governance Structure
CBK’s governance structure comprises an 11-member board appointed by His Excellency The President with advice from National Assembly; 4 members are ex officio while 7 are non-executive directors who serve five year terms subject to renewal upon discretion from Cabinet Secretary Finance Treasury & Planning . They meet at least once every quarter or when directed by Governor/Deputy Governor or Chairman Board Committee to discuss major issues facing monetary policies implementation amongst others issues affecting performance of commercial banks operating under their purview . Functions
As stipulated in Section 3(2) of Central Banks act [Cap 491], there are four main functions that fall under CBK’s remit: Monetary Policy formulation – this includes determining short term interest rates , participating openly with markets forces to influence pricing mechanism concerning debt instruments etc.; Currency Issuance – This involves printing legal tender paper money known as “Kenya Shillings” , minting coins circulating throughout East African Community ; Supervision – Ensuring all licensed institutions comply with prudential regulations set out by Supervisor Banking Institutions Division; Foreign Exchange Reserves Management – Managing external reserves held against liabilities like imports payments thereby ensuring adequate liquidity levels exist maintain stable exchange rate environment conducive for sustained economic growth .
