A law proposed by the Treasury aimed at regulating the financial sector will emasculate the central bank (CBK), the bank’s governor said on Tuesday.
CBK governor Patrick Njoroge said the proposed bill also fails to address a cap on commercial lending rates.
He was referring to a bill published last week for review and comment by the public and industry.
The bill says digital lenders will be licensed by a new Financial Markets Conduct Authority and bound by any interest rate caps the Authority sets.
“The bill emasculates the central bank (which).. is under attack,” Njoroge told a news conference.
The bill did not propose repealing the government’s cap on commercial lending rates, which local banks and the International Monetary Fund blame for sluggish growth in private-sector credit.
Dr Njoroge also said lower fiscal deficit targets set by authorities would be challenging to meet, but if they were achieved it would create room for monetary easing.