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