Written by Jackson Okoth | From Standard Digital

The Central Bank of Kenya ( CBK) posted a net surplus of Sh13.5 billion from Sh3.6 billion the previous financial year. However, the bank of last resort’s operating expenses are expected to increase significantly in the 2014/15 financial year.

This is according to a report by the Auditor General on CBK for the financial year ending June 30, 2014 –According to audited CBK financial statements 2014, operating expenses increased to Sh12.2 billion from Sh9.4 billion.

This has been attributed to the write-off made on the cost of Sh1.2 billion currency. The cost of currency coins also increased by Sh780 million to Sh1.75 billion compared to Sh976 million last year. Currency costs are expected to increase in the 2014/15 financial year, as the bank plans to issue new generation currency to comply with constitutional requirements. Article 231(4) of the Constitution states that all notes and coins shall bear only images that depict Kenya.

These images exclude portraits of any individual. This means CBK must print new notes as well as mint new coins to conform the law.

During the financial year ended June 30, 2014, the bank’s net interest income after impairment charge was Sh4.8 billion, up from Sh1.9 billion in 2013. The increase was due to reduction in monetary policy expenses, attributed to the stance taken by the Monetary Policy Committee.

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