Treasury PS Explains Why Shilling Has Strengthened Dramatically, Issues a warning to Kenyans
Treasury PS Explains Why Shilling Has Strengthened Dramatically: Treasury Principal Secretary Chris Kiptoo on Wednesday, warned that Kenyans hoarding dollars risk incurring more losses after the shilling posted its strongest gain against the dollar for the first time in over a decade.
He attributed the shilling’s dramatic rise to investors’ confidence drawn from the government’s move to buy back the Ksh316 billion (USD2 billion) Eurobond maturing in June this year.
He 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.
In the latest Central Bank of Kenya data, the shilling is currently trading at 153 against the dollar, hitting its strongest streak since November last year.
In a bid to defend the government’s move to sell the new Eurobond worth Ksh234 billion (USD1.5 billion), the PS stated the securities had attracted more than USD6 billion in offers.
Kiptoo stated, “We did a roadshow and we explained to investors our economic situation and plan and gave them all the information they needed, and they believed in our story,”
“We got quality investors who are going to stay for the long term and are not going to go to the second market. This is a confidence boost to us because everyone now believes Kenya is good for business,” he added.
On the plus side, A stronger shilling guarantees flexible and lower debt servicing as Kenya offsets loans in dollars. Reports indicate that within the past week, the debt service costs were reduced by Ksh144.8 billion.
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