Central Bank moves to rescue ‘depreciating’ shilling
The Central Bank of Kenya has warned that it will take appropriate measures to deal with those out to take advantage of the depreciating Kenya shilling. The shilling has sunk to new lows against the U.S. Dollar and is currently trading above the a hundred shilling mark in exchange.
Anxiety in the forex market continues to loom following the continued decline of the shilling against the Dollar over the last couple of months.
CBK maintains that it is closely monitoring the situation. According to a statement signed by CBK Governor Dr. Patrick Njoroge; “CBK will take appropriate measures to eliminate disorderly market developments.”
This could be seen as a warning to dealers who always thrive in panic and speculation to gain from the volatility in the market, as a result of a weak shilling.
The shilling opened the trading this week on a fresh low against the U.S. Dollar trading at a 103 shillings, this being the lowest since October 2011 when it dropped to a 101.39 shillings.
During that period, the then President Mwai Kibaki directed CBK to deal firmly with persons involved in arbitrage or speculation, for their own gain.
CBK is, however, confident the stance taken by the Monetary Policy Committee last week to raise the Central Bank Rate by 1.5% to 11.5% will ensure stability of the shilling as well as contain inflation.
Report by Dennis Otieno
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