CBK veils intervention on shilling after IMF loan withdrawal

The Central Bank of Kenya has delayed the release of weekly data on dollar reserve over the week that the International Monetary Fund revealed it had withdrawn access to dollar loan.

IMF withdrew Kenya’s access to a $1.5 billion standby loan in June last year yet CBK had lied that it could still access the money.

Without the money, the shilling is exposed to speculators and international shocks such as the price of oil and dollar outflows.

According to Bloomberg markets, the shilling lost 0.6 percent against the greenback from 101.27 to the dollar to 109.0.

It is widely expected that the Central Bank intervened by selling dollars to reduce demand pressures spiked by speculators over the direction of the shilling.

CBK maintains a stranglehold over the currency market and has banned local economist, currency traders and bank treasurers from projecting the direction of the Kenyan currency or even making abnormal orders for dollars.

Debate on the shilling will have serious ramifications on Kenya’s debt since every margin of devaluation is a margin of increase in the amount of debt since we will require more shilling for every dollar borrowed.

Reuters said that the Kenyan shilling was stable against the dollar on Monday amid market expectations of possible volatility from end-month importer demand

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