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Gachagua’s Big Blunder Forces CBK to Issue Urgent Statement

by Robert Mwangi
2 mins read

Deputy President Rigathi Gachagua continues to find himself in trouble for making sensational statements that still sound like election campaign rhetoric.

On Sunday evening, 2nd September, Gachagua said during a live interview on Citizen TV that the country is in a big financial mess.

He claimed that the situation was so bad that the Central Bank of Kenya (CBK) did not have sufficient foreign exchange reserves to give to oil importers.

The DP alleged that the Uhuru Kenyatta administration had embezzled almost everything in its last days.

“There was a forex problem because of State capture. Very senior people in government own certain banks and are involved in forex business and the Central Bank of Kenya was no longer in charge. On Saturday, we had a crisis because the CBK did not have enough foreign currency for oil imports,” he claimed.

The statement, which had the potential to rock the financial market, prompted the CBK to issue a press statement just hours after Gachagua’s allegation.

The CBK explained that the country has adequate forex reserves to cover several months, clarifying that oil importers source their foreign exchange from commercial banks and not the CBK.

“The Central Bank of Kenya (CBK) notes the comments by the Deputy President, His Excellency Rigathi Gachagua, in an interview on Citizen TV on October 2, 2022. CBK would like to provide the correct position regarding where oil importers obtain the requisite foreign exchange and about the adequacy of CBK’s foreign exchange cover.

“First, following the complete liberalisation of the foreign exchange market in the 1990s, all foreign exchange for private transactions is obtained from commercial banks. The CBK does not supply foreign exchange for transactions other than for National Government (that is, the government’s own imports or debt service repayment) or CBK’s operations.”

The CBK disclosed that it has a reserve cover of 4.19 months as of September 29, in line with the CBK Act (Section 26).

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