The Kenyan shilling slipped further against the US dollar at the opening of the currency markets Monday, continuing on a record five-year plunge last seen in 2004, analysts said.
The Central Bank of Kenya (CBK) quoted the shilling at a record low of 81.55 against the US dollar, but the commercial banks quoted the shilling at lower rates of 82.10 against the dollar, the lowest in almost six years, which it last touched in 2004, currency dealers said.
The record slide of the shilling has been attributed to recent move by the central bank to increase the foreign currency reserves, by increasing the import cover from the current four months of import cover to six months, in line with the East African Community (EAC) latest directives on financial stability.
Market dealers said the latest slide of the shilling was partly due to the CBK’s intervention, which included the purchase of more than eight million euros from the market.
The purchase of the euros has put more pressure on the dollar, whose demand in the local economy has been rising due to the debt crisis crippling the Eurozone countries.
Dealers said the continuing plunge of the Shilling was mainly driven by the increased demand for the dollar.
The shilling held its ground against the euro and the sterling.