Kenya Said to Favor Sirima as Next Central Bank Governor

Kenyan central bank Deputy Governor Haron Sirima is the favorite to succeed Governor Njuguna Ndung’u when his term expires on March 3, according to two people with knowledge of the discussions.

President Uhuru Kenyatta may select Sirima because of his extensive experience in sovereign debt management, according to one of the people. Both people declined to be identified because they aren’t authorized to speak publicly about presidential appointments.

Sirima, 53, is among at least four candidates who analysts said may replace Ndung’u when his second, four-year term ends. Other possible contenders for the job are Geoffrey Mwau, economic affairs director at the National Treasury, Isaac Awuondo, managing director of Commercial Bank of Africa, and Rose Ngugi, an adviser at the International Monetary Fund.

Manoah Esipisu, a spokesman for Kenyatta, declined to comment on the candidates and said an announcement will be made in due course.

Sirima was appointed deputy governor in 2011 when Kenyatta was finance minister and the country was in the midst of a currency crisis. At the time, investors had lost faith in the central bank’s ability to manage the turmoil triggered by the worst drought in 60 years, which had sent the shilling to a record low of 106.75 per dollar and drove up the inflation rate to almost 20 percent.

Price Pressures

After those earlier missteps that prompted an attempt by lawmakers to have him fired, Ndung’u, 55, has restored confidence in the central bank. The Monetary Policy Committee has kept the benchmark interest rate unchanged at 8.5 percent since May 2013 and brought inflation down to an average of 6.9 percent in 2014.

Sirima’s appointment may help to underscore monetary policy stability in the face of a sliding currency. While plunging oil prices have helped to curb inflation, the shilling’s 6.3 percent drop against the dollar this year is adding to price pressures.

“The next central bank governor will largely continue on the policies overseen by outgoing Governor Njuguna Ndung’u, with a primary focus of keeping inflation within the target band of 5 percent and keeping the Kenyan shilling steady,” Ahmed Salim, an analyst at Teneo Intelligence in Dubai, said in an e-mailed response to questions on Tuesday.

The shilling fell 0.2 percent to 91.42 against the dollar as of 4:45 p.m. in Nairobi.

Eurobond Sale

Sirima joined the central bank in 1986 as a graduate trainee in the exchange control department. He holds a PhD degree in entrepreneurship from Kenyatta University in Nairobi and a Masters degree in Economics from Manchester University in the U.K.

“If they want to recruit internally, I think Sirima will be the man,” Aly-Khan Satchu, chief executive officer of Nairobi-based Rich Management Ltd. said by phone. Kenya may seek a successor with an “intuitive understanding of the markets” following its entry into global capital markets last year, he said.

The government raised $2 billion in June from its inaugural Eurobond auction and collected an additional $750 million in December when it reopened the sale. The yields on the notes due June 2024 have dropped 61 basis points, or 0.61 percentage point, to 6.27 percent since its issue.

The Nairobi-based Daily Nation reported that other contenders for the job include Kamau Thugge, principal secretary at the National Treasury, and Chris Kiptoo, Kenya’s director of TradeMark East Africa, a regional organization that helps to boost trade links.

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