The controversy between the National Treasury and the Central Bank of Kenya (CBK) over the Financial Market Conduct Bill is distracting us from a more important problem we should be focusing on as a country-namely- the case for a sound and robust consumer credit legislation in Kenya. With the plan to repeal the contentious interest rate capping law still in abeyance- and with a section of legislators sending signals that they will fight to have the caps retained, a sterile turf war between the CBK and the National Treasury was clearly a political miscalculation.
It seems that navigating the country back to repealing the interest rate capping law is going to require a lot more political dexterity on the part of both the National Treasury and the CBK. I am strong supporter of operational independence of the CBK. I support a system where interest-rate policy is free of political manipulation. I believe that the fairly steady growth and long periods of low inflation regimes we have enjoyed in recent years are attributable to sound conduct of monetary policy by the CBK.
