For large investors, the impact of their actions on market prices is no longer negligible and they potentially incur large transaction costs due to “market impact”, such that fluctuations in market liquidity – the ease with which a security can be transformed into cash – become a first-order concern.
This explains the close working relationship between CBK and KDIC. They both have complementary mandates of financial stability. Kenya’s financial sector remains sound and resilient, supported by strong macroeconomic fundamentals.