Tough questions for government on the dollar-denominated bond plan

Money-dollars

Kenyans were holding onto a record Sh905 billion worth of dollar deposits in local banks as at July. FILE PHOTO | NMG

A few days ago, President William Ruto announced plans by his government to issue dollar-denominated bonds in the domestic market to raise financing for government projects.

There has been punditry suggesting the issuance of this bond is meant to target idle dollars held in local bank accounts. This is erroneous because there are no idle dollars. What is being referred to as idle money are fixed deposits chasing returns from banks.

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