• About Us
  • Archives
  • SWG Registration
Samrack Media
Mahiga Homes
  • Home
  • ALL NEWS
  • Diaspora
  • Africa
    • AFRICA
    • KENYA
  • BUSINESS
    • BUSINESS
    • INVESTMENTS
    • REAL ESTATE
    • TECHNOLOGY
  • Politics
  • Health
    • HEALTH
    • EDUCATION
  • Religion
  • People
    • PEOPLE
    • LIFESTYLE
    • RELATIONSHIPS
  • Obituaries
  • Videos
  • Events
No Result
View All Result
  • Home
  • ALL NEWS
  • Diaspora
  • Africa
    • AFRICA
    • KENYA
  • BUSINESS
    • BUSINESS
    • INVESTMENTS
    • REAL ESTATE
    • TECHNOLOGY
  • Politics
  • Health
    • HEALTH
    • EDUCATION
  • Religion
  • People
    • PEOPLE
    • LIFESTYLE
    • RELATIONSHIPS
  • Obituaries
  • Videos
  • Events
No Result
View All Result
Samrack Media
No Result
View All Result

Central Bank of Kenya calls for calm as shilling slides

samrack by samrack
January 16, 2017
in Diaspora, Kenya, News, U.S Diaspora
A A
0
Central Bank of Kenya calls for calm as shilling slides
Share this
FacebookTwitterPinterestEmailWhatsAppLinkedIn

Central Bank of Kenya calls for calm as shilling slides 

The sound of a falling shilling can taint the legacy of Kenya’s central bankers, cause panic and spark raging debate on its impact on the economy. Former Central Bank of Kenya (CBK) governor Njuguna Ndung’u saw the shilling swing between 67 and 92 units to the dollar when he took office and when he left. But in between, there was the 2011 depreciation of the currency to a low of 107 units, which was followed by 19.72 per cent inflation in November. The slump led to a parliamentary probe that blamed Prof Ndung’u for hesitating to act and propelling the slide. In 2015, the current governor, Patrick Njoroge, had Kenyans holding their breaths once more when the shilling almost touched the 107 level. In September that year, the shilling slid to 106 against the greenback, but then dramatically strengthened to 100 units and stayed there for a year.

Shilling remains under pressure as oil importers’ dollar demand rises Investor anxiety However, the lull seems to be over as the shilling loses ground to the dollar, with a 1.4 per cent decline this year to 103.9 units. The reasons behind the slide are varied, but key among them has been a stronger dollar that is wreaking havoc in most emerging markets. According to financial news wire Bloomberg, the shilling has fallen every trading day since December 23, a week after the US Federal Reserve raised interest rates. “Uncertainty relating to the tightening of US monetary policy and its implications for global capital flows remain a concern. The strengthening of the US dollar may result to further capital outflows from emerging markets and a weakening of their currencies,” CBK wrote to Business Beat. Public commentary has, however, steered more towards investor anxiety over instability in an election year. The slide has also come at a time when the country is making coupon payments for the Eurobond tap sales. As this is done in dollars, it has eaten into reserves. On the last trading week of the year, the country’s forex reserves hit a 12-month low of 4.56 months of import cover. Dollar reserves stood at $6.97 billion (Sh723.8 billion), below the psychological mark of $7 billion (Sh727 billion). As in 2015, the governor has stamped his authority and summoned traders, banks and analysts and warned them against projecting a further slide of the shilling.

Weakening shilling will make it harder to put ugali on the table Bloomberg reported that executives from some of the country’s biggest lenders were summoned to meetings with policy makers last week and cautioned against making comments or forecasts about the shilling deemed overly negative amid the currency’s worst run of losses since 2006. Some of the analysts Business Beat spoke to declined to speak on the shilling, citing regulator caution. Further, during annual projections by Stanbic Bank last week, CEO Philip Odera said anxiety in the forex market was overblown. He said the shilling’s slide is a function of importers building up stocks, large oil imports and dividend payments, as well as a post-Donald Trump gain on the promise of tax cuts and infrastructure spending. “This disconnect between supply and demand is very normal during this time of the year. We have seen some statements that are bordering on irresponsible commentary,” Mr Odera said. And Dr Njoroge appears to be taking a proactive approach to the currency’s slide, with CBK mopping up excess cash in the market to check the ability to buy dollars. The latest data shows the regulator removed Sh42 billion from the market, and injected Sh18.6 billion through reverse repos, which it has been using for more than a year to shore up banks struggling with liquidity.

Shilling dips as CBK blames speculators Gag order CBK has also been selling dollars in the market, although its gag order has left traders tight-lipped on the amount used to support the shilling. Forex reserves also gained in the first week of the year to $7 billion, or 4.62 months of import cover, with the country receiving a steady stream of diaspora remittances. Although the latest figure has not been released, Stanbic regional economist Jibran Qureishi intimated people living abroad are usually more willing to send resources home during a difficult period. With the current drought and elections close, Kenyans abroad might just be the shilling’s saviours. The Treasury has also indicated that Kenya is raising at least $1.3 billion (Sh135 billion) through syndicated loans, financing that will help shore up forex reserves. The shilling’s strength is important to the country as Kenya imports more than it exports. A weak shilling would increase the cost of good from abroad, sparking inflation. This would be terrible in a year when election fears may lead to hoarding and stockpiling, increasing demand and, therefore, the cost of goods. The current drought already threatens to increase the cost of food, the main component of Kenya’s inflation rate. This would have a domino effect as CBK will be forced to adopt a tightening stance and raise interest rates, though this will not help matters much as credit growth is already low and non-performing loans are at a record high.

Fidelity Bank’s sale for a song gets nod CBK, however, remains positive Kenya will ride the wave as key macroeconomic indicators, including inflation, have remained relatively stable.
Read more at: https://www.standardmedia.co.ke/

Tags: Central Bank of Kenya calls for calm as shilling slides
Previous Post

Mass Voter Registration Drive Kicks Off in Kenya

Next Post

Mobile Banking Lifts Kenyans Out Of Poverty

Related Posts

Kenya Airways Subsidiary Fahari Aviation To Receive Embraer Eve eVTOL Aircraft From 2026
Business

Kenya Airways Subsidiary Fahari Aviation To Receive Embraer Eve eVTOL Aircraft From 2026

June 22, 2022
Kenyan Nurse Given a Three-story Home in Lebanon, Pennsylvania After Volunteer Work
Diaspora

Kenyan Nurse Given a Three-story Home in Lebanon, Pennsylvania After Volunteer Work

June 22, 2022
Uhuru’s Daughter Ngina Kenyatta Ties the Knot in a Traditional Wedding Ceremony
Diaspora

Uhuru’s Daughter Ngina Kenyatta Ties the Knot in a Traditional Wedding Ceremony

June 22, 2022
Untold Stories of How Thika Road Estates Got Their Names
Business

Untold Stories of How Thika Road Estates Got Their Names

June 22, 2022
President Uhuru Rejects To Assent Into Law ICT Bill, Opting To Send It Back To Parliament For Review
Kenya

President Uhuru Rejects To Assent Into Law ICT Bill, Opting To Send It Back To Parliament For Review

June 22, 2022
Police in Nairobi recovered 22 firearms and 565 rounds of ammunition during an auction mission on Tuesday in Kilimani suburbs, Nairobi county.
Business

Police in Nairobi recovered 22 firearms and 565 rounds of ammunition during an auction mission on Tuesday in Kilimani suburbs, Nairobi county.

June 22, 2022
Next Post
Mobile Banking Lifts Kenyans Out Of Poverty

Mobile Banking Lifts Kenyans Out Of Poverty

Please login to join discussion
Job Openings Below is a list of current job openings at Northeast Clinical Services, Inc.. Please click on an opening in the list to view details and apply. Job Openings Below is a list of current job openings at Northeast Clinical Services, Inc.. Please click on an opening in the list to view details and apply. Job Openings Below is a list of current job openings at Northeast Clinical Services, Inc.. Please click on an opening in the list to view details and apply.
ADVERTISEMENT
ADVERTISEMENT

Latest News

Kenya Airways Subsidiary Fahari Aviation To Receive Embraer Eve eVTOL Aircraft From 2026

Kenyan Nurse Given a Three-story Home in Lebanon, Pennsylvania After Volunteer Work

Uhuru’s Daughter Ngina Kenyatta Ties the Knot in a Traditional Wedding Ceremony

Untold Stories of How Thika Road Estates Got Their Names

President Uhuru Rejects To Assent Into Law ICT Bill, Opting To Send It Back To Parliament For Review

Police in Nairobi recovered 22 firearms and 565 rounds of ammunition during an auction mission on Tuesday in Kilimani suburbs, Nairobi county.

George Wajakoya’s Running mate: Who is Justina Wangui Wamae

IEBC set to make corrections to voters’ register

Kenya cannot ban Mitumba without upsetting the US,Just ask Rwanda

Transition/Death Announcement of Francis Kagumba Mwenenia (Father to Pastor Naomi Kagumba (Lowell,MA ) of St Stephen’s Church Dracut,MA

We are grateful for your monthly or one-off donations To Samrack Media: Cash App No: 781-888-8770 $SAMRACK001

Money

New Digital Skills Helps Unemployed Kenyan Youth Earn In Cryptocurrency

New Digital Skills Helps Unemployed Kenyan Youth Earn In Cryptocurrency

by samrack
November 19, 2021
0

New Digital Skills Helps Unemployed Kenyan Youth Earn In Cryptocurrency This week sees the launch of a new initiative to equip...

A simple guide to Government Bonds investing in Kenya

A simple guide to Government Bonds investing in Kenya

by samrack
September 17, 2021
0

A simple guide to Government Bonds investing in Kenya A treasury bond (T-bond) is a medium term to long term...

Politics

Police in Nairobi recovered 22 firearms and 565 rounds of ammunition during an auction mission on Tuesday in Kilimani suburbs, Nairobi county.

Police in Nairobi recovered 22 firearms and 565 rounds of ammunition during an auction mission on Tuesday in Kilimani suburbs, Nairobi county.

by samrack
June 22, 2022
0

Police in Nairobi recovered 22 firearms and 565 rounds of ammunition during an auction mission on Tuesday in Kilimani suburbs,...

George Wajakoya’s Running mate: Who is Justina Wangui Wamae

George Wajakoya’s Running mate: Who is Justina Wangui Wamae

by samrack
June 9, 2022
0

She has risen to prominence, following her selection as a running mate for one of the only four presidential candidates...

  • About Us
  • Archives
  • SWG Registration

© 2021 SAMRACK - Diaspora News & Updates; design by: Samrack.

No Result
View All Result
  • Home
  • ALL NEWS
  • Diaspora
  • Africa
    • AFRICA
    • KENYA
  • BUSINESS
    • BUSINESS
    • INVESTMENTS
    • REAL ESTATE
    • TECHNOLOGY
  • Politics
  • Health
    • HEALTH
    • EDUCATION
  • Religion
  • People
    • PEOPLE
    • LIFESTYLE
    • RELATIONSHIPS
  • Obituaries
  • Videos
  • Events

© 2021 SAMRACK - Diaspora News & Updates; design by: Samrack.

Page generated in 0.891 seconds. Stats plugin by www.blog.ca