Nairobi - Kenya’s central bank warned bankers and traders against making comments or forecasts about the shilling that it deems too negative amid the currency’s worst run of losses since 2006, according to people familiar with the matter.
Executives from some of the country’s biggest lenders were summoned to meetings with policy makers last week, the people said, asking not to be identified because they aren’t authorized to speak about the issue. Others were telephoned individually and warned against making comments the regulator says are fuelling the shilling’s decline, they said. Grace Okara, the central bank’s communications director, acknowledged by phone that she’d received an e-mailed request from Bloomberg for comment, without responding to the questions.
Central bank officials blame speculators for the slide in the currency of East Africa’s largest economy, and told bankers to let the shilling be guided by market fundamentals, the people said. The central bank’s stance is that the more people comment on the currency’s movements, the steeper its decline, they said.
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Kenya’s shilling has weakened every trading day since December 23, according to data compiled by Bloomberg. The currency depreciated as the dollar strengthened after the US Federal Reserve raised interest rates and as investors wary of previous post-election violence in Kenya grow increasingly cautious ahead of a presidential vote in August.