Obama visit could tame shillings slide CBK governor

The Central Bank of Kenya has expressed optimism in taming the downward slide of the shilling against major world currencies.

CBK Governor Patrick Njoroge, during an appearance before the Senate Committee on Finance, said they are focused on taming volatility in the exchange rate and have no optimal level for the shilling, which means there is no limit to be crossed in the ongoing battle for the shilling’s value.

“The real concern for us is the volatility of the exchange rate, how much they move. We don’t have an optimal level of the exchange rate,” Njoroge said.

He expressed optimism that the recent visit by United States President Barack Obama will have a positive effect on investor confidence and therefore a likely fightback by the shilling against the dollar.

The CBK governor added that the effects of Obama’s visit will be felt long after he is gone.

“There is more confidence and people are placing positive bets. There is foreign currency coming into the market. Hotels were full not just for the visit, but there has been a spillover effect. We couldn’t have done a better job advertising the country to the world,”  said Njoroge.

The shilling is off a three-year low of 103.85/95 hit in mid-July, but is still 11 per cent down against the dollar in the year to date.

The Senate Committee on Finance is seeking to find out the interventions CBK is putting in place to stop the shilling’s slide against the US dollar.