Bloomberg News

Kenya’s Central Bank Will Hold Press Briefing on Shilling

June 23, 2011

(Updates with report of planned action against lenders in second, sixth paragraphs.)

June 23 (Bloomberg) -- Central Bank of Kenya Governor Njuguna Ndung’u will address a media briefing today about developments in the foreign-exchange market, said Samson Burgei, head of communications at the bank.

The announcement follows a report in Business Daily, a Nairobi-based newspaper, that the central bank plans to take regulatory action against three lenders to curb speculative trading in the currency market.

“The purpose of the press conference is to address the current concerns regarding developments in the Kenya shilling exchange rate,” Burgei said in an e-mail today from Nairobi. The briefing will start at 3 p.m. in the capital, he said.

The shilling, Africa’s worst-performing currency this year, has depreciated 11 percent against the dollar since Jan. 1. It traded 0.5 percent stronger at 90.40 at 11:02 a.m. in Nairobi.

The central bank plans to rid the market of the notion that nothing can be done to stop speculative activity, the Nairobi- based Business Daily newspaper reported today, citing Ndung’u. It didn’t name the banks.

“Our aim is to ensure that the forex interbank rate is truly driven by market events and fundamentals as is always the case and as the euro crisis gets closer to resolution,” the newspaper quoted Ndung’u as saying.

Kenya should tighten monetary policy in order to stem the shilling’s decline to a 17-year low and curb inflation that may quicken to 22 percent later this year, Razia Khan, head of African research at Standard Chartered Bank Plc, said yesterday.

--Editors: Paul Richardson, Ben Holland.

To contact the reporters on this story: Johnstone Ole Turana in Nairobi at jturana@bloomberg.net; Eric Ombok in Nairobi at eombok@bloomberg.net.

To contact the editor responsible for this story: Paul Richardson at pmrichardson@bloomberg.net.


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