President Uhuru Kenyatta also reappointed CBK Chairman Mohammed Nyaoga and Sheila M’Mbijjewe as Njoroge’s deputy in what is seen as a vote of confidence in the current team at the helm of the regulator. Their appointment was contained in a special Gazette notice dated May 24 and which takes effect from June 18. “For four years, we have refined and revamped the governance structure of the bank, addressing policy, systems and procedures to make the bank serve the public better,” said Nyaoga yesterday. Governor Njoroge’s reappointment is expected to give him more time to deal with the raging storm over the implementation of a new currency as well as overseeing the implementation of the new regulations on Credit Reference Bureaus and the Banking Charter in a bid to rein in lenders. At the Monetary Policy (MPC) briefing last week, Dr Njoroge said the regulator had introduced a new Islamic Bank law and would amend the Microfinance Act to include Islamic microfinance banking as well as the Stawi loans to push instant loans to Small and Medium-sized Enterprises (SMEs). President Kenyatta during the launch of the new banknotes last week said the freedom of the Central Bank was “operational independence” but added that the regulator must cooperate with the executive. However, some analysts see the reappointment of the trio as an effort by the Jubilee administration to perpetuate policies that have allowed Treasury to borrow aggressively into the domestic market. “I think it is a reward for being very accommodating to aggressive fiscal policy and not challenging Treasury’s aggressiveness,” said George Bodo, a sub-Saharan Africa banking analyst. Instead of introducing two new deputy governors as required by the law, President Kenyatta contravened the policy on retirement by appointing M’Mbijjewe, who attained the age of 60 last year. Analysts have also pointed out that the CBK, an independent institution, has been constrained by the rate cap and a Treasury that badly needs to borrow cheaply in the domestic market to keep its finances in check. Stability of the shilling has ensured dollar-denominated foreign debt does not spiral out of hand while the rate cap ensures banks flood Treasury coffers with cheap bids. Under Njoroge’s guidance, the regulator has been able to keep the shilling below the psychological mark of 107 units against the US dollar in October 2011 that blotted his predecessor’s Prof Njuguna Ndungu’s career.

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