President William Ruto has recently stated that wealthy individuals holding dollars in Kenya will soon suffer losses because his administration has put in place steps to ensure that demand for foreign currency will fall in the coming weeks.
President Ruto stated in Nairobi on Wednesday, at the listing of Laptrust Imara (REIT) at the Nairobi Stock Exchange (NSE), that one of these measures included the State finalising an agreement that will allow oil importers to purchase the commodity in shillings rather than dollars.
Petroleum imports can account for up to 30% of Kenya's total import bill.
Every month, the sector requires close to Ksh.64 billion ($500 million) in imports to meet the country's expanding need for diesel, petrol, and kerosene.
The landed cost of petroleum goods, of which Kenya is a net importer, is heavily influenced by currency fluctuations.
"We just negotiated a market-driven arrangement in our fuel sector that will see Kenya obtain all of our gasoline needs on a deferred six-month credit, eliminating a demand of USD 500 million dollars from this market," President Ruto stated.
"I am providing you free advice that those of you who are hoarding funds may soon suffer losses." You should do what you need to do since the market will change in a few weeks."
He also stated that the government is working with the Central Bank of Kenya (CBK) to re-establish the interbank exchange market in order to handle the dollar situation further.
"I am pleased that the companies in that sector, including our banks, are stepping forward and participating, as well as cooperating with the Central Bank, so that we can reclaim control of our market and ensure that it is not skewed by brokers," President Ruto said.
"As a government, we have done everything we needed to do to guarantee that we lessen the burden on people who wish to realise their returns in dollars."