CBK says depreciation of Kenyan shilling may have overshot

NAIROBI, Kenya, Dec 6 – The Governor of the Central Bank of Kenya (CBK), Kamau Thugge, has said that the Kenyan shilling has overshot the required rate.

He also believes that the depreciation of the local unit against major currencies such as the U.S. dollar, among others, is enough.

“Our view is that and I have said this before there has since been significant adjustments and we now feel that the shilling has depreciated enough and in deed may have overshot the rate that is required to have and equilibrium rate that is stable and that’s competitive…,” Thugge said.

He counted on a decision to increase the CBK rate by 200 basis points to 12.5 percentage points yesterday by the Monetary Policy Committee (MPC) as a solution to the problem.

“And if it becomes very necessary, if the exchange rate does not stabilize as we expect then we will take stronger actions to ensure that the exchange rate is stabilized.”

He also warned individuals hoarding dollars for investment purposes that the regulator is keen on stabilizing the local unit with tight monetary policies to stabilize the local foreign exchange market.

By Davis Mabeya

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