Friday, 17 July 2015 19:53
NAIROBI: Kenya’s shilling held steady on Friday after the central bank said it was ready to act to stem a sharp depreciation in the currency. Shares finished lower.
At the 1330 GMT close of trade, leading commercial banks posted the shilling at 102.45/55 per dollar, compared with Thursday’s close of 102.45/65 per dollar.
“The statement is good but the market is waiting to see what they will do,” said one senior trader after the central bank issued a statement late on Thursday.
The central bank said it was monitoring the currency closely and was “taking appropriate measures to eliminate disorderly market developments.” It said it was ready to step up its activities “to stem a sharp depreciation.”
The bank has already raised rates by 3 percentage points to 11.5 percent since June and has intervened at least three times this week to sell dollars to support the shilling. The next Monetary Policy Committee meeting is on Aug. 5.
The shilling has been under pressure from the global strength of the dollar, a slide in valuable tourism revenues and a widening current account deficit.
In the stock market, the benchmark NSE-20 share index fell 0.8 percent to close at 4,638.44 points.
The index turned negative for the year in April and it is down more than 8 percent in the year to date, hit by investor aversion to risk. Investors have been fleeing into the safety of cash and less risky assets in developed markets.
In the debt market, bonds worth 22 million shillings were traded, down from the previous day’s volume of 222 million shillings.
