The Central Bank of Kenya has offered dollars directly to banks on the foreign exchange market to support the weakened shilling against the dollar.
The central bank also absorbed 5 billion shillings ($ 49.21 million) of money market surplus cash through buy-sell agreements, which also provided support for the local currency.
Tensions on Kenya’s national currency came on the heels of an IMF report released on October 23, 2018, pointing to a low-to-moderate past default risk. In this note, the IMF noted that the high level of debt, combined with the increasing use of non-concessional borrowing, has increased budget vulnerabilities and increased interest payments on public debt to almost one-fifth of revenues.
