NAIROBI (Xinhua) --
Kenya’s domestic debt has declined by 203.9 million U.S. dollars
after the government stopped borrowing from the Central Bank
The debt fell from
25.07 billion dollars at the end of July to 24.86 billion
dollars last week, when the government did not take an
overdraft, latest data from the Central Bank released on Monday
Overdraft at the
Central Bank is usually equated to printing of more cash, which
increases liquidity in the market.
A higher liquidity
in the market leads to decline of the value of the local
currency against major world currencies, according to analysts.
has been tight in the market for the past two weeks as a result
of low government spending, helping the shilling strengthen
against the dollar to 100.40.
The low government
spending can be partly attributed to failure by the government
to borrow cash through the overdraft from the Central Bank as it
seeks to manage mounting debt.
The peak of
government borrowing through overdraft hit 568 million dollars
at the end of June. Overall public debt currently stands at
about 50 billion dollars, with domestic debt consisting of half
the amount and foreign the rest.
Last week, the
National Treasury announced it is seeking to recruit debt
management experts to provide guidance on determination of
borrowing ceilings for national and county governments, as well
as preparing proposals for debt restructuring.
The move was in
response to the rising concerns over debt sustainability of the
East African nation, with public debt standing at 56 percent of
the gross domestic product.