Kenya shilling rises on bank intervention

NAIROBI – The Kenya shilling rose sharply against the US dollar on Thursday after the central bank sold the greenback to reverse a rapid depreciation by the local currency, traders said.

The shilling dropped below the key psychological level of 81 versus the dollar on Friday, and reached a fresh historic low of 83,25/45 shillings per dollar in early trading on Wednesday. On Thursday the Central Bank of Kenya (CBK) entered the market and sold dollars, sending the local unit racing up to 80,90/81,10 by 0745 GMT, after Wednesday’s close of 82,40/60.CBK Governor Andrew Mullei said the central bank, as well as importers of goods and services, were concerned by the recent rapid fall in the price of the local currency.”To calm the local foreign exchange market, the Central Bank has taken steps to stabilise the Kenya shilling exchange rate and ensure that it reflects the true market value of the shilling,” he said in a statement issued on yesterday morning.”The major cause of the recent rapid weakening of the shilling against the US dollar has been the intensity of speculative activities by some local market players,” he added.Traders in Nairobi said the central bank sold dollars yesterday and sent the shilling climbing against the greenback.”Clients had been complaining that there was no liquidity and traders had been pushing up the rate saying (dollar) inflows could not match demand,” one trader at a major bank said.The recent slide by the shilling, which has fallen from around 79,60 three months ago, has been blamed on several factors including hints by donors that they might pull aid out of Kenya over graft allegations and high global oil prices.-Nampa-ReutersOn Thursday the Central Bank of Kenya (CBK) entered the market and sold dollars, sending the local unit racing up to 80,90/81,10 by 0745 GMT, after Wednesday’s close of 82,40/60.CBK Governor Andrew Mullei said the central bank, as well as importers of goods and services, were concerned by the recent rapid fall in the price of the local currency.”To calm the local foreign exchange market, the Central Bank has taken steps to stabilise the Kenya shilling exchange rate and ensure that it reflects the true market value of the shilling,” he said in a statement issued on yesterday morning.”The major cause of the recent rapid weakening of the shilling against the US dollar has been the intensity of speculative activities by some local market players,” he added.Traders in Nairobi said the central bank sold dollars yesterday and sent the shilling climbing against the greenback.”Clients had been complaining that there was no liquidity and traders had been pushing up the rate saying (dollar) inflows could not match demand,” one trader at a major bank said.The recent slide by the shilling, which has fallen from around 79,60 three months ago, has been blamed on several factors including hints by donors that they might pull aid out of Kenya over graft allegations and high global oil prices.-Nampa-Reuters