Central Bank of Kenya spend Sh. 51 Billion


01 May 2015 | by
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 Central Bank of Kenya spend Sh. 51 Billion

CBK spent Sh. 51 billion in four months defending the shilling from a slow slide of devaluation. The Kenyan shilling weakened and hit its lowest since November 2011, due to increased dollar demand among importers, while stocks closed higher. On Wednesday, commercial banks were quoted the shilling at 94 to the dollar, amid fears that it could hit 95 by the end of the week..

CBK spent Sh. 51 billion in four months defending the shilling from a slow slide of devaluation. The Kenyan shilling  weakened and hit its lowest since November 2011, due to increased dollar demand among importers, while stocks closed higher. On Wednesday, commercial banks were quoted the shilling at 94 to the dollar, amid fears that it could hit 95 by the end of the week..  Traders expressed fears that the shilling was unlikely to stabilise unless the central bank offered support by selling dollars, as it hasdone in the past.The Kenyan currency has been hit by a slowdown in foreignexchange revenues from tourism after a spate of militant attack that scared visitors away.

And responding to fears that the shilling could plummet, CBK said the exchange rate of the Kenya Shilling against the US Dollar has witnessed an upward pressure over the last one week.  “This is mainly a reflection of a strong US Dollar in the global market coupled with an elevated but seasonal demand for foreign exchange from the local corporate sector witnessed at this time of the year”, CBK says on its website. The Bank is closely monitoring developments in the foreign exchange market and will continue to use appropriate monetary policy instruments to minimize volatility of the Kenya shilling exchange.

“The Bank has adequate foreign exchange reserves in excess of 4.5 months of imports to cushion the exchange rate against these short-term shocks and volatility”, it added. On the Nairobi Securities Exchange, the main NSE-20 Share Index was up 34.29 points, or  0.7 percent, to close at 5,061.09 points. Among stocks leading the rise was British American Investments Co (Kenya) Ltd (Britam), which closed 9.8

percent higher at 22.50 shillings, bouncing from the previous session’s nine-month low.Analysts said the stock had been pummeled despite the company’s assurance that Mauritian lender Bramer Banking Corp Ltd (BBCL), found to be running a “Ponzi” investment scheme, held no shareholding in it.Britam had confirmed earlier this month that some of its directors had held positions simultaneously on the board of  Bramer, but said the companies were run independently

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