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The Capital Markets Authority (CMA) is urging the government to consider issuing local-currency debt to check depreciation of the shilling as opposed to foreign currency-denominated bonds.

Chief Executive Paul Muthaura says raising capital in local currency from the domestic or foreign markets would help curb a likely depreciation of the Kenya shilling.

As of July 2018 according to last figures published by the National Treasury of the Ksh 2.5 trillion total external debt, 71.7%, was in US dollars, Euro at 14.9 per cent, Chinese Yuan at 6.17 per cent, Japanese Yen at 4.3 per cent and the Sterling Pounds 2.6 per cent.

Other currencies accounted for 0.3 per cent of the portfolio. Total public debt as at September last year stood at Ksh 5.15 trillion.

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With a planned move to go for international bond market, CMA is calling of safeguards against forex exposure.

CMA deployment of local currency through offshore debt financing could be one of the remedies to quell the crushing debt

Muthaura urged treasury to deploy measures which CMA says would also address the issues of insolvency especially for bonds that have not been listed to spur confidence.

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At the same time, CMA says the Corporate bond market has been relatively dry but that it would partner with the government in achieving the needed goals by adopting global financial innovation frameworks in order to streamline the capital markets sector.

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