The bank says it also has no preferred rate for the shilling and only intervenes to smooth out any volatility. (Reporting by Hereward Holland; Editing by George Obulutsa)
NAIROBI, March 29 (Reuters) - The Kenyan shilling lost further ground against the dollar on Wednesday, under
pressure from fuel importers and manufacturers, but liquidity
had increased as activity in the long-dormant interbank market
rose, traders said.
At 0924 GMT, commercial banks quoted the shilling at
132.00/20, compared to Tuesday's close of 131.80/132.00.
Refinitiv data shows the shilling has lost 6.6% of its value
against the dollar this year.
Last week, President William Ruto said the government was
working with the central bank to revive the interbank foreign
exchange market, which had been inactive in recent years,
because of what traders said was aggressive policing by the
central bank.
"People are still buying from each other on the interbank
market – so there's been some good price discovery and the big
(foreign exchange) spreads we had previously have narrowed
down," said one trader at a commercial bank.
"The shilling is still sliding because the fundamentals are
pushing it, but it's more market-determined."
The lack of a vibrant interbank foreign exchange market has
partly been blamed for an acute shortage of hard currency that
has even forced the government to seek longer credit periods for
essential imports like petrol.
The central bank has repeatedly denied undue interference in
the foreign exchange market, saying the regulator was merely
playing its role of enforcing discipline.
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