NAIROBI, Aug 8 – Kenya may cut the amount of foreign currency banks are allowed to hold, the central bank said on Monday, as it seeks ways to stem a steep decline in the value of the country’s shilling.The local currency has lost 16 percent against the dollar this year, battered by falling appetite for riskier currencies in frontier markets like east Africa and a perception that the country’s monetary policymakers have fallen behind the curve.
Central Bank head Njuguna Ndung’u said commercial banks had been given plenty of leeway in the amount of funds they could hold in foreign currencies as a percentage of core capital, and this might be reviewed.
Source: Reuters Africa newsletter
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