Increased dollar buying weakens the Kenya shilling
A rising Kenyan
import bill is an important factor behind increased central bank dollar
buying and there is no intention to intervene to influence the value of
the shilling, the head of the central bank said on Saturday.
Foreign exchange
dealers have grumbled that fundamentals dictate the shilling should be
stronger, but that central bank purchases of foreign currency have
capped its gains.
“Dollar purchases
are to protect reserves and to build up reserves, not just for fun,”
central bank governor, Njuguna Ndung’u told Reuters on the sidelines of
the International Monetary Fund and World Bank meetings in Washington.
“Our import bills have risen significantly to slightly over $1
billion a month, so it means that keeping four months of import cover
means being in the neighbourhood of $4 billion,” Mr. Ndung’u said.
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