This archive report was first published on 3 July 2019.
On July 3, 2019, the Kenyan shilling touched an eight-month low of 103 units to the US dollar, driven by high dollar demand and high liquidity.
The Central Bank of Kenya (CBK) has been working to manage the situation, withdrawing liquidity from the market through its open-market operations.
On Wednesday, the CBK mopped up Sh12 billion worth of liquidity, but the funds quickly returned to the market, forcing the CBK to continue its efforts to maintain optimal liquidity levels.
The high dollar demand is partly driven by Kenya's status as a net importer of goods, which could lead to a rise in the cost of living.
According to Commercial Bank of Africa, analysts will be closely monitoring developments around the fifteen-year bond issued by the CBK, which may aid in curbing the rising liquidity levels.
