CBK releases Ksh.7.4B to boost Govt in fight against coronavirus pandemic

Elevated demand of the U.S. dollar coupled with a decrease in tourism numbers and export earnings has seen the Kenyan shilling fall to a four-year low of Ksh. 106.60 at close of market.

The shilling has been on a steady fall since Kenya registered its first coronavirus patient on Friday last week.

Even as the shilling continues to struggle, the Central Bank has released Ksh. 7.4billion shillings to support the government’s fight against the COVID-19 disease.

CBK Governor Patrick Njoroge said the money was gained from the mop-up of the old Ksh. 1000 bank notes during the demonetization process.

“As you recall in September last year we concluded the demonetization of our currency relating to our old generation one thousand bank notes. That matter was concluded and as a result of that, Ksh. 7.4billion worth of bank notes never came back to the system,” he said on Friday.

The CBK boss said the bank is giving back the money to boost the government’s efforts to combat the coronavirus pandemic.

President Uhuru Kenyatta said the funds will be directed to support Kenyans to overcome the current health crisis.

“That money goes to help our health facilities and our health workers.That again is something we appreciate and this is what I mean when I say Kenyans working together can achieve miracles,” he said.

During the meeting, the President announced a further Ksh. 1billion allocation by the Government for hiring of more health workers needed to increase the country’s capacity to deal with the Coronavirus pandemic.

The President further ordered that all outstanding Value Added Tax (VAT) refunds and pending bills would be settled within 30 days.

“Critically, we all recognize that the volume of business has gone down. We need to ensure that we have cash flow to be able to keep ourselves afloat as we go through these trying times,” he said.

President Kenyatta added that the government has lifted a ban on its entities from holding conferences and seminars in private hotels so as to keep the hospitality sector vibrant.

“We have lifted that temporarily until this is over so that our hotel beds get occupancy and you in turn are able to keep your workers employed,” he said.

The intervention has come at a time when hotels in Kwale County are on the verge of closing shop following the dwindling numbers of guests.

Most hotels are now operating at below 30% despite it being considered peak season for tourists.

“This is due to the travel ban from Europe which is our big market. This is a big blow because at this season we could be operating between 70 and 80%,” said Jotham Mwang’ombe, Diani Reef Resort Manager.