By BUSINESS DAILY

More by this Author

The Central Bank of Kenya (CBK) Governor, Dr Patrick Njoroge, has reiterated that the Kenyan shilling is properly valued and that its value was dictated by the forces of demand and supply.

Dr Njoroge said the shilling's value against other currencies, such as the US dollar, had no fundamental miscalculation as had been suggested by the International Monetary Fund (IMF) and other analysts.

“There has been a lot of discussion about our exchange rate assessment and the exchange rate policy--- We don’t have a view about the level or direction of the shilling. We let the market drive the price of the shilling,” he said at a post-Monetary Policy Committee meeting briefing in Nairobi.

Intervention measures

‘We only intervene to minimise volatility in the market since volatility can be destabilising in the foreign exchange market and other areas of the market.”

Dr Njoroge said that CBK relied on several approaches in doing that, pointing out that the level of any misalignment of the shilling, if any, was in the region of five percent.

The governor told the press that CBK would soon upload on its website a comprehensive explanation of the approaches it uses on the shilling, adding that any intervention measures were only disclosed to the market at an appropriate time, not to cause jitters.

The shilling has come under spotlight since September when IMF terminated Kenya’s access to a $1.5 billion (Sh152bn) precautionary loan facility.