CBK Steps in as Kenyans Rush to Dump Dollar for Shilling.
CBK Steps in as Kenyans Rush to Dump Dollar for Shilling: The Central Bank of Kenya (CBK) moved in to purchase dollars after Kenyans began selling them for the shilling which has witnessed a dramatic rise in the last 12 days.
According to a report by Reuters on Thursday, CBK purchased the dollars to halt volatility likely to arise as a result of the sudden growth.
According to reports, the shilling dropped by 3 per cent from Ksh150 on Wednesday to Ksh145.00/Ksh146.00, with strong bids that would have pushed the trading to Ksh139.
One Trader stated,” The Central Bank showed up to buy, so I think they don’t want too much volatility. “If they hadn’t come in we would probably be looking at levels of maybe 130 because everybody knows offshore inflows are coming.”
This comes after the Treasury Principal Secretary Chris Kiptoo warned Kenyans who are still holding on to their dollars, to sell out before it goes down further.
Kiptoo stated,” I want to encourage Kenyans that the risk of failure to settle for the Eurobond is gone. Sell your dollars and get back to business. Don’t do any speculation anymore,”
“The issue has been addressed. There is now confidence and you can tell the shilling is beginning to improve. As of this morning, I was told it was trading at 151 units and yesterday it was at 157, and previously it was at 160 and that is very good news,” he added.
Notably, President William Ruto’s economic adviser David Ndii agreed with the observation outlining that individuals had tried to hoard dollars speculating that the state could have defaulted on its earlier Eurobond.
Ndii said, “Markets have opened. Eurobond default risk has evaporated. Speculative dollar positions unwinding. That popping sound you hear is Azimio bubble bursting.”
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