Central Bank of Kenya buys US Dollars to Stabilize Kenyan Shilling

The Central Bank of Kenya (CBK) has initiated the purchase of US dollars from local banks in an effort to stabilize the Kenyan shilling in the foreign exchange markets. This move comes in response to a surge in foreign exchange inflows, particularly driven by remittances. As of October 5, 2024, the CBK’s forex reserves had risen to $8.186 billion, up from $7.503 billion the previous month, reflecting a significant improvement.

CBK Governor Kamau Thugge emphasized that the bank’s primary goal is to reduce volatility in the market rather than directly manipulate the exchange rate. The Central Bank reaffirmed its commitment to maintaining a stable economic environment by intervening in the foreign exchange market as needed to ensure stability.

The steady accumulation of forex reserves underscores the CBK’s proactive approach in managing foreign currency inflows, which is crucial in supporting the Kenyan economy amidst global financial fluctuations.