Kenyan economy to weather Brexit storm, CBK says

Kenya is unlikely to feel the pinch of the effects of Britain’s decision on whether to pull out of the European Union, the Central Bank of Kenya has said.

The referendum set for Thursday known as Brexit, is already anticipated to have ripple effects on the world economy that has been slowing down over the last two years.

Central Bank Governor Dr Patrick Njoroge however said on Tuesday that while Kenya’s economy is integrated with the global economy, most of the country’s income is generated from regional and African partners and does not foresee a downturn in economic growth.

“Brexit would affect us mainly through indirect channels which is the channel of our neighbors to the extent that they are weaker and that would slow us down a little,” Dr Njoroge said at a briefing.

Britain’s decision to leave the European Union is expected to shift the global economy with growth expected to slow down.

According to the central bank governor, the country has enough foreign exchange reserves to ride the effects of theThursday decision in the short term. By last week the reserves stood at $7.6 billion (Sh768.3 billion) or five months of import cover.

“If you think of the foreign exchange market, it is quite stable and therefore there’s no source of concern there,” he said.

Kenya also access to a $1.5 billion (Sh151.7 billion) emergency credit facility from the International Monetary Fund to use in case of shocks. The money can be used in the next two years, if the economy comes under pressure from external shocks.