The Kenyan shilling weakened following the arrest of Treasury Cabinet Secretary, Henry Rotich, who was charged with various offences related to the award of two dam construction tenders.
On Tuesday morning, commercial banks quoted the shilling at 103.65/85 per dollar, compared with 103.50/70 at Monday’s close, a drop of 0.5 percent since the charges against the minister was announced.
According to a senior currency trader, the weakening of the shilling was caused by jitters about the arrest of the finance minister which could create a power vacuum at the helm.
“The currency has lost due to market jitters about the arrest of the finance minister. It has created a power vacuum in Treasury albeit temporarily,” he was quoted by a local daily.
During the hearing, the Treasury CS denied the graft charges after spending a night in a cell, it is the first time in Kenya that a sitting Finance Minister has been arrested and charged over graft.
He was charged alongside his deputy, Principal Secretary Kamau Thugge, and 26 other officials linked to the Kimwarer dam scandal where an estimated KSh21 billion is said to have been misappropriated.
According to the charge sheet, Rotich and other accused persons conspired to defraud the Government of Kenya between December 17, 2014, and September 27, 2018.
They were also charged for willful failure to comply with applicable procedures and guidelines relating to procurement as well as engaging in a project without prior planning.
Other charges include abuse of office, committing an offense of financial misconduct, fraudulent acquisition of public property, wilful neglect to perform official duty and committing an offense of financial misconduct.
In a declaration made by President Uhuru Kenyatta during the State of Nation address in April, he said that all government officers cease holding office once they are charged in court.