News

The Central Bank of Kenya (CBK) has pumped into the market more dollars to prop up the shilling after weakening to hit 106.15/35 on Monday’s close.
The shilling weakened close to its all-time low in early trading yesterday, weighed down by corporate dollar demand and US currency’s strength. At 10.22 am, the shilling traded at 106.60/70 close to the low of about 107 in October 2011; but finally closed at 105.5 in the afternoon against the greenback.


The CBK introduced close to $30 million into the system as CBK governor Dr. Patrick Njoroge met banks Chief executives to deliberate on the weakening local unit. Kenya has $433 million precautionary facility from International Monetary Fund (IMF) for usage against balance of payment shock in the economy.
CBK has in the past few months occasionally intervened to support the currency by selling dollars. The bank planned to mop up Sh11 billion in excess liquidity yesterday after mopping up Sh14 billion in the market on Monday.
The mop-ups make it costly to hold onto dollars, which in turn supports the shilling. CBK has spent since January about $1 billion in trying to cushion the shilling from losing more rapidly to the greenback.
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