Central Bank of Kenya

Central Bank of Kenya (CBK) started operating in Kenya in mid 1966. It was established through the Central bank of Kenya Act of 1966, a Kenyan Act of Parliament. The inception of the bank followed the desire by the three East African countries, Kenya Uganda and Tanzania to sovereign monetary and financial policies. Before the establishment of CBK the three East African countries operated under the East Africa Currency Board which collapsed son after the formation of CBK.

CBK policy is determined by the board of directors whereas it is the Monetary Policy Committee that is responsible for formulating the monetary policy. The board of directors consists of the Governor also acting as the chairman, the deputy governor also acting as the deputy chairman, the permanent secretary who is a non-voting member together with five other non-executive directors.

It is the Kenyan President who appoints all the board members. Each member works for a term duration of four years. However, the board of directors can be reappointed to the office for as long as they do not hold office for more than two terms. The headquarters of CBK is located in Kenya’s capital city, Nairobi and it has three other branch offices in such major towns as Kisumu, Mombasa and Eldoret. The Kenya School of Monetary Studies, the only monetary institution in Kenya, is also owned by CBK.

The Central Bank of Kenya functions under quite a number of functional segments. These consist of the motes and coins segment, monetary policy, treasury securities, national payments system, bank supervision, publications and research together with deposit protection fund. The main responsibilities of CBK include the formulation and implementation of the monetary policy in order to accomplish and sustain stability in the general price levels. CBK also promotes liquidity, solvency as well as appropriate functioning of a firm market based financial system.