Financial Liquidity Surges Past KSh6 Trillion

Good evening 👋🏽. It's Brian from The Kenyan Wall Street

In today's newsletter edition,

• Liquidity in Kenya’s financial system has surpassed KSh6 trillion.

• In response to the floods and drought, the Treasury has proposed a KSh 13.5 billion supplementary budget for the State Department for Special Programmes.

Financial Liquidity Surges Past KSh6 Trillion

By Harry Njuguna 

Kenya’s financial system has crossed a symbolic threshold, with broad money supply climbing past KSh 6 trillion for the first time as deposits, credit, and foreign currency balances expand across the banking sector. The surge reflects five years of steady balance-sheet growth, with liquidity rising more than 50% since 2020 and nearly KSh 1 trillion added in a single year during the post-pandemic rebound. Government borrowing, recovering private-sector lending, and stronger external assets have together pushed liquidity deeper into the economy.

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Kenya Ramps Up Disaster Spending

By Brian Nzomo

Kenya is now confronting the strange arithmetic of climate extremes: floods sweeping through cities and river basins even as drought continues to grip the country’s arid lands. In response, the Treasury has proposed a KSh 13.5 billion supplementary budget for the State Department for Special Programmes, a dramatic jump from just KSh 653.7 million in the original allocation. Most of the money would flow into emergency relief, with billions channeled through agencies to deliver food and assistance to millions of households displaced or facing hunger. The proposal, still awaiting parliamentary approval, underscores how climate shocks are rapidly reshaping the government’s spending priorities.

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Kenyan Derivatives Hit Record Highs

By Harry Njuguna 

The Nairobi Securities Exchange (NSE) is riding a wave of unprecedented derivatives activity, with February turnover surging to KSh 140.9 million, its highest since the platform’s 2019 debut. In response, the exchange is recalibrating margins on major equity and index futures, tightening collateral requirements for big banks while trimming some smaller contracts. The frenzy reflects a growing appetite for hedging and leveraged play in Kenya’s equity markets, as investors seek shelter and opportunity amid broader volatility. Behind the numbers lies a quiet transformation: futures are no longer niche tools, they are fast becoming central to the country’s financial choreography.

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KenGen Shrinks Board Under New Law

By Harry Njuguna

Kenya’s power generator, KenGen, has become the first state-owned enterprise to shrink its board under the Government Owned Enterprises Act 2025, cutting directors from fourteen to nine in a governance reset that could ripple across the country’s listed public firms. The overhaul forces the exit of several independent directors, including chairman Alfred Agoi Masadia, and ends the long-standing practice of government-appointed board chairs. Under the new structure, six seats are reserved for independent directors selected through a ring-fenced process designed to protect minority shareholders.

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Heads Up 

Crypto Insights with Luno

Last week tested both markets and traditional safe havens. Crypto continues to prove its utility with payments solutions across Africa, while in regulation, the Federal Reserve says banks should treat tokenised securities like traditional securities. 

🔸 The price of Bitcoin rose to around US$74,000 last week as geopolitical tensions between the US and Iran escalated, CoinDesk reports. S&P 500 futures declined to a multi-week low of 6,718 points earlier in the week on Tuesday, before recovering to around 6,840 on Friday. Despite these recoveries, bond markets remain uneasy, with rising yields pointing to renewed inflation concerns and uncertainty around Fed rate cuts.

🔸Mainstream adoption of crypto continues among merchants and customers, with the shift attributed to easing regulatory uncertainty and greater consistency in crypto regulatory frameworks, IT Web reports. Luno Pay recently integrated with Ezeebit, enabling merchants to accept crypto and stablecoins and settle in fiat, while also allowing customers to spend digital assets across a wide range of popular brands in South Africa.

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