Kenyan central bank buys dollars to curb volatility as shilling rallies

The Kenyan central bank, known as the Central Bank of Kenya (CBK), has recently purchased dollars on the foreign exchange market to curb volatility in the shilling, which is the country's currency. According to traders, the CBK bought dollars at a rate of 104.25 shillings per dollar, which was slightly weaker than the previous day's rate of 103.95 shillings per dollar.

The purchase of dollars by the CBK is intended to stabilize the shilling and reduce its volatility in the foreign exchange market. The shilling has been experiencing fluctuations in recent months, with its value strengthening against other currencies such as the US dollar. This has led to concerns about the country's economic stability and its ability to attract foreign investment.

The CBK has been actively managing the country's foreign exchange reserves in an effort to maintain a stable shilling. In addition to purchasing dollars, the CBK also sells foreign currency on the market when the shilling strengthens too much. This helps to ensure that the country has enough foreign currency reserves to meet its obligations and support economic growth.

Overall, the purchase of dollars by the CBK is a common practice used by central banks around the world to manage their currencies and maintain stability in the foreign exchange market. It is important for investors and businesses operating in Kenya to monitor the country's currency fluctuations and understand how they may impact their operations.