Kenya’s central bank warned bankers and Forex traders from making any forecasts or comments about the shilling that makes the currency looks too negative amid the currency’s worst run of losses since 2006.
Talking about the issue is not authorized, some people commented on the matter, asking not to be identified.
People said that executives from some of the country’s biggest lenders were demanded to meet with policy makers last week. Others were called individually and were warned not to make comments as the regulator says these comments are boosting the shilling’s fall.
Analysts noted that the shilling is expected to be under pressure in 2017 after being stable in 2016, falling only 0.1 percent against the dollar.
The strengthened dollar in the global markets after the Trump-win and the Fed’s rate hike and expectations of higher rates again in 2017 is pressuring the shilling.
Reductions in capital inflows into the capital markets due to uncertainty caused by the August general election and declining forex reserves, currently standing at 7 dollars, equivalent to 4.6 months of import cover, are expected to affect the shilling.
The currency hit a 15-month low at the end of last week, traded at 103.6 against the dollar, following continuing demand from multinationals and oil importers. It was the first decline since the low of 104.10 hit in October 2015.