(Updates with comment on IMF loan in last paragraph.)
Oct. 26 (Bloomberg) -- Kenya is committed to taking additional action to stabilize the shilling and curb inflation, while steps already taken by the central bank have “begun to yield dividends,” Finance Minister Uhuru Kenyatta said.
“We remain hopeful that when the CPI numbers are released next week, the rate will have begun to edge downwards,” Kenyatta told reporters today in Nairobi, the capital, citing ongoing rains and a decline in oil prices. “We will remain vigilant and ready to take additional measures to stem any inflationary pressures and instability in the foreign-exchange market.”
The shilling is the world’s worst-performing currency this year, falling 20 percent against the dollar. It weakened for a fourth day today, dropping 1 percent to 102.10 per dollar at 11:44 a.m. local time. Inflation surged to 17.3 percent last month, more than triple the government’s 5 percent target.
The central bank raised interest rates to a record 11 percent this month and reduced commercial lenders’ foreign- exchange exposure limits to 10 percent from 20 percent to stem volatility in the exchange rate. The bank’s monetary policy committee will meet on Nov. 1.
Kenya has asked the International Monetary Fund for additional funds that will increase its credit facility to $750 million from $500 million in the next two years to “cushion our balance of payments,” Kenyatta said.
--Editors: Paul Richardson, Ben Holland.
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