Oct. 5 (Bloomberg) -- The Kenya Private Sector Alliance, which represents almost 200 companies in East Africa’s biggest economy, said it recommended the central bank introduce a currency band and intervene to stabilize the shilling.
The group met officials including Central Bank of Kenya Governor Njuguna Ndung’u and Finance Ministry Permanent Secretary Jospeh Kinyua yesterday, according to an e-mailed statement from the Nairobi-based body. Other suggestions included using a core-inflation rate to guide long-term monetary policy and to reduce recurrent budget expenditure to boost the economy, it said.
The central bank and Finance Ministry officials gave the alliance a verbal commitment to adopt its recommendations, an official from the alliance, who declined to be identified in line with the group’s policy, said in a phone interview today.
The central bank “agreed that the shilling should be more predictable and operate on market forces within a set band range of the Kenya Shilling so that CBK will intervene immediately there is any variance within this band,” the alliance said.
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