Treasury CS Prof. NJUGUNA NDUNGU explains why the Kenyan Shilling has strengthened against the dollar in the last one week

Thursday, February 22, 2024 - Treasury Cabinet Secretary, Professor Njuguna Ndungu, has explained why the Kenyan shilling has strengthened against the U.S. dollar over the past few days.

Speaking during the National Executive Retreat in Naivasha, the CS said that potential investors shied away because they had not resolved the Eurobond issue.

He said the Market speculated the government would go to the market to buy dollars to try and benefit.

"We noticed that however much we tried to talk about the strategy to resolve the Eurobond, there were always some doubts because a big portion especially our microstructure of the market believed that the government would still go to the market to buy dollars to effect payments of the Eurobond," he said.

"That is why all of a sudden the market coordinated itself to speculate on the dollar and they were buying as many dollars as possible to try and benefit from the time the government goobedes into the market."

He said that the treasury established that after the Eurobond was in the Forex Bureau.

"The market was acquiring a waiting option to resolve the Eurobond.  We needed a mechanism to dislodge the market from that option," he added.

The Kenyan Shilling has continued to significantly gain against the dollar.

As of Tuesday, February 20, the Kenyan Shilling was being exchanged at 142.81 per US dollar according to the Central Bank of Kenya.

The Kenyan DAILY POST