Central Bank of Kenya (CBK) Governor Patrick Njoroge rejected claims of a parallel exchange rate emerging due to dollar shortages, emphasizing the market consistently supplies $2 billion monthly to meet demand. This figure, disclosed during a May 2022 statement, covers sectors importing up to $100 million, according to the governor.
Manufacturers reported paying over Sh120 per dollar—above the CBK's official rate of Sh116.84—as import costs rose. The Kenya Association of Manufacturers (KAM) highlighted persistent supply-demand gaps, citing commodity price surges like crude palm oil, which tripled to $1,980 per metric ton by March 2022 from $700 in March 2020.
Njoroge stated, "If you have an actor coming in looking for $1 million, $10 million, or even $100 million and claims that the market is dysfunctional, then kazi kwako (it’s your work to find out why)." He noted unusual demand spikes, such as dividend payments, had stabilized by May 2022.
The CBK maintains $8.177 billion in foreign exchange reserves as of May 2022, equivalent to 4.86 months of import cover. However, KAM warned that rising costs for fertilizers, steel, and other essentials strained forex availability despite the reserves.
Previous concerns about a parallel market resurfaced after a Stanbic Bank Kenya research note suggested its existence, prompting the bank to distance itself. Njoroge reiterated the CBK's stance against speculative reports undermining market confidence.
