Which means, these Governments can do as they wishes with their own currency, i.e. they can equal their currency to any unit or amount (1 USD = 10 Euros or 1 USD = 5 Ounces of Gold), as creators of their own currency they have absolute ownership, hence have other reliable options other than taxing or borrowing, or be forced into overseas debt collection, and can pay any invoice of any size, at any time.
In contrast, Non-Monetary Sovereign Nations like those in the E.U, have surrendered their exclusive unlimited power to create their own currency, hence use one currency; the Euro. Limited to create Euros, these states ability to create or obtain money is pegged on the existing laws guiding on borrowing & taxing.
Kenya is a Monetary Sovereign Country, but does it have Unlimited power or control over its own currency, can it be used to settle debts or payments to another country, and is it able to stand on its own without the backing of another currency or commodity like Gold.
Despite being a Monetary Sovereign Nation, Kenya has limited control over its own currency; it creates issues & controls its circulation in the country, and accepts in payment of taxes and other obligations. But it will be difficult or impossible to pay other countries using Ksh. instead a generally acceptable Currency like U.S.D. will be used for payment.
Our currency is backed by other Currencies like the U.S.D, British Pound, Euros, or Commodities like Gold where the Central Bank has created Reserves for such currencies to meet the Country’s obligation in payment of external debts and for Imports.
Hence to equate our currency like U.S, Japan where they have a free reign in printing more money to meet their obligations and use it to pay external debts is impossible. We have no option but to find other ways to raise money like increasing taxes, borrowing (internally or externally), selling of Government bonds etc.
If the Government can create good fiscal policies, reduce or eliminate institutional corruption, promote local industries, maintain favorable balance of payment position, reduce recurring expenditure, create employment opportunities and engaging in developmental projects. Then we can maintain a favorable Debt-to- GDP Ratio and sustain our Public debt without necessarily burdening the citizens with Taxes.