(Bloomberg) -- Kenya should consider issuing domestic dollar bonds to boost liquidity in its foreign-exchange market, according to Kamau Thugge, an economist set to become the nation’s next central bank governor.

It’s one of “the things I would like to do as soon as I get into that position,” Thugge on Tuesday told lawmakers vetting him for the role in the Kenyan capital, Nairobi.

His comments come after Kenya’s shilling weakened to its lowest level against the dollar this month. The East African nation’s foreign reserves have dwindled to $6.48 billion as of May 18, equivalent to 3.6 months of import cover, according to central bank data.

A domestic dollar-denominated bond would help mop up the foreign currency held in the banking system, Thugge said. The securities, as well as disbursements from multilateral financial institutions including a $1 billion loan from the World Bank this week, will boost the nation’s foreign reserves, he said. 

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The lawmakers are expected to approve President William Ruto’s nomination of Thugge. He will replace Patrick Njoroge, whose second and final four-year term as governor of the Central Bank of Kenya ends on June 17.

Thugge signaled he might push for banking consolidation once in office, with a view of having “fewer banks, stronger banks.” This will be good for consumers as it would “cause more competition in the market which may ultimately lower interest rates,” he said.

Thugge listed his priorities to include fighting inflation, improving bank supervision and strengthening micro-finance institutions. He also wants Kenya’s payments system to be integrated with an intra-Africa trade platform that’s being championed by the African Export–Import Bank.

--With assistance from Cherian Thomas.

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