
The Central Bank of Kenya (CBK) has revealed a net deficit of KSh 24.3 billion in its Annual Report and Financial Statements for the fiscal year 2023/2024, marking a sharp contrast to the surplus of KSh 150.5 billion recorded in the previous financial year. The deficit was primarily driven by an unrealized exchange loss of KSh 73.6 billion as the Kenya Shilling gained strength against the US Dollar.
Despite the deficit, CBK reported a strong operational performance, with its operating surplus more than doubling to KSh 49.2 billion, up from KSh 19 billion in 2022/2023. This improvement was attributed to higher returns from the Bank’s securities portfolio and deposits.
Under Governor Dr. Kamau Thugge’s leadership, CBK introduced transformative reforms aimed at bolstering market efficiency and ensuring macroeconomic stability. Among these were the adoption of an inflation-targeting monetary policy framework, the implementation of the Kenya Foreign Exchange Code, and the launch of the state-of-the-art Dhow Central Securities Depository (DhowCSD).
These initiatives proved effective in controlling inflation, which fell from 7.9% in June 2023 to 4.6% in June 2024, well within the target range of 5% ± 2.5%. Additionally, the Kenya Shilling appreciated by 17% during early 2024, mainly due to strengthened investor confidence and prudent monetary policies.
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The banking sector remained stable and resilient during the fiscal year, supported by strong liquidity and capital adequacy ratios. Gross loans and advances grew by 1.5% to reach KSh 4.04 trillion, although gross non-performing loans increased to KSh 657.6 billion from KSh 576.1 billion. CBK’s consolidated assets rose by 9.9% to KSh 1.96 trillion, while liabilities increased to KSh 1.56 trillion.
A highlight of the year was the launch of the Dhow Central Securities Depository, a cutting-edge financial market infrastructure designed to enhance operational efficiency and financial inclusion. Officially inaugurated by President William Ruto in September 2023, the DhowCSD facilitates smooth investment processes for domestic and diaspora investors through user-friendly mobile and web platforms.
Since its implementation, the system has seen remarkable growth, with active Central Securities Depository accounts doubling to 83,259 by June 2024 from 41,125 at launch. The DhowCSD has also garnered international acclaim, earning the Central Banking’s Payments and Market Infrastructure Initiative Award 2024 for its transformative role in Kenya’s financial landscape.