July 16, 2015 / 2:52 PM / 5 years ago

UPDATE 1-Kenya central bank taking steps to stem shilling weakness

(Updates with shilling’s levels, rates)

NAIROBI, July 16 (Reuters) - Kenya’s central bank said on Thursday it was taking measures to eliminate “disorderly market developments” in the foreign exchange market after the shilling weakened to new 3 1/2-year lows.

The shilling sunk to 103.85/95 on Monday, its lowest level since October 2011, before the bank pumped dollars into the market, helping to lift it to around 102.00 per dollar.

The bank said in a statement it had adequate foreign exchange reserves to deal with volatility in the market and was ready to enhance its market operations, such as selling dollars, “to stem a sharp depreciation of the Kenya shilling”.

It said its decision to raise lending rates by 150 basis points on July 7 would stabilise the exchange rate and anchor inflationary expectations.

For the complete statement, click:

here

Reporting by Duncan Miriri; Editing by Edmund Blair, Larry King

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