
The Central Bank of Kenya (CBK) demonstrated resilient performance in FY 2023/24 despite significant economic challenges.
The Bank recorded a net deficit of KSh 24,342 million compared to a surplus of KSh 150,494 million in FY 2022/23, primarily due to an unrealized exchange loss of KSh 73,555 million as the Kenya Shilling strengthened against the US Dollar.
However, the Bank’s operating surplus improved to KSh 49,213 million from KSh 19,005 million the previous year, driven by higher average returns on securities portfolio and deposits.
Under the leadership of Governor Dr. Kamau Thugge, CBK implemented reforms to enhance market efficiency and macroeconomic stability, including introducing a new inflation-targeting monetary policy framework, the Kenya Foreign Exchange Code, and launching the Dhow Central Securities Depository.
These measures helped maintain overall inflation within the target range of 5±2.5%, with inflation declining to 4.6% in June 2024 from 7.9% in June 2023, while the Kenya Shilling appreciated by 17% in early 2024.
The banking sector remained stable and resilient during the period, with strong liquidity and capital adequacy ratios. Gross loans and advances increased by 1.5% to KSh 4.04 trillion, though gross non-performing loans rose to KSh 657.6 billion from KSh 576.1 billion.
CBK’s consolidated assets grew to KSh 1,960,317 million from KSh 1,783,209 million, with liabilities increasing to KSh 1,560,359 million.
The DhowCSD has significantly improved market efficiency and financial inclusion, garnering international recognition.
Looking ahead, CBK’s 2024-2027 Strategic Plan, themed ‘Good to Great,’ focuses on resilience, digital transformation, service excellence, and human capital development.
While the Bank faces challenges such as filling key leadership roles, it remains committed to its mandate of maintaining price stability and fostering a stable market-based financial system.
In October 2024 CBK relesed its Financial Stability Report 2023 which provideed an assessment of developments and risks that Kenya’s economy and financial sector faced in 2023 and during first half of 2024.
Globally, the period experienced high inflationary pressures triggering strong and faster pace of monetary policy responses by advanced countries.
This came on the backdrop of a reversal from a long period of very low interest rates, low volatility, and ample liquidity, associated with sustained accommodative monetary policy in advanced economies.
The strong and faster pace of monetary policy tightening resulted in steep rise in interest rates, causing unexpected and unintended impact on financial sector.