November 21, 2024
CBK Proposes Stricter Liquidity Requirements for Banks to Strengthen Financial Stability
This move follows social media rumors of a cash crunch, which the CBK and banking leaders dismissed, pointing to an industry liquidity average of 51% in 2023.
The Central Bank of Kenya (CBK) has proposed higher liquidity requirements for banks to better manage financial stress. Banks will need to maintain liquidity above the current 20% threshold to ensure they can meet withdrawal demands during crises. This move follows social media rumors of a cash crunch, which the CBK and banking leaders dismissed, pointing to an industry liquidity average of 51% in 2023.
The new guidelines also require banks to manage liquidity risks in individual currencies and adopt a net stable funding ratio to reduce reliance on short-term funding, bolstering the resilience of Kenya’s banking system.
