SCARCITY

CBK not rationing dollar supply - bankers

KBA CEO Habil Olaka says the dollar supply is well balanced in the market.

In Summary

•He added that the dollar supply is well balanced in the market.

•"We would like to inform the market that there has been no such direction from CBK in writing or verbal,'' KBA CEO Habil Olaka said. 

KBA chief executive Habil Olaka /FILE
KBA chief executive Habil Olaka /FILE

Kenya Bankers Association (KBA) has refuted claims members have been asked by the regulator to ration dollar supply in the market.

In a statement, the bankers' lobby said it in constant talks with the Central Bank Kenya (CBK) to resolve dollar supply glitch in the market.

"We would like to inform the market that there has been no such direction from CBK in writing or verbal,'' KBA CEO Habil Olaka said. 

He added that the dollar supply is well balanced in the market.

He said the situation at the individual bank level may deffer leading to some banks experiencing a shortage and therefore taking individual decisions to service customers in their own ways.

Olaka has attributed the elevated demand over the past month to the move by companies to remit dividends to meet oversee supplier obligations in the wake of Covid-19 pandemic.

Meanwhile, manufacturers are struggling to raise enough dollars at a higher cost to bring in raw materials, an aspect likely to push up the cost of living.

Yesterday, Kenya Association of Manufacturers (KAM) chairperson Mucai Kihanya said members are finding it difficult to mobilize $100,000 from local dealers, straining relationships with external suppliers. 

"We started to experience this tightening end of November last year. We are now forced to accumulate dollars for a number of days in order to meet our supply-demand,'' Mucai said. 

The persisting dollar shortage is now forcing importers into the black market to up liquidity for their supply.