Central Bank seeks to mop up Sh10b from the money market

Nairobi; Kenya: Central Bank of Kenya sought to mop up Sh10 billion from the money market yesterday, it said. The regulator was in the money markets last week to mop up Sh5 billion in excess liquidity using repurchase agreements and term auction deposits. CBK often soaks up excess shilling liquidity through repos or other instruments to support the currency by making it more expensive to hold dollars. The shilling has been weighed down by demand for dollars to pay for imports, outstripping supply from exports. Key sources of foreign exchange like tourism, tea and horticulture are performing poorer this year compared to normal levels. Traders forecast the shilling to continue trading at 89.00 to 89.50 to the dollar. They said expectation that CBK would sell dollars when the shilling nears 89.50 had so far kept it from weakening beyond that level.