By BUSINESS DAILY More by this AuthorThe Central Bank of Kenya (CBK) has said the shilling was overvalued by up to 25 percent in a rare admission that suggests the ongoing free-fall of the currency is far from flattening out. “I think for several years now, we have had an overvalued exchange rate, in fact, if you go back six years ago there was a raging debate as to whether the Kenyan shilling exchange rate was overvalued and at that time the Bretton Woods institutions felt that actually the exchange rate was overvalued by anywhere between 20 to 25 percent,” Dr Thugge said. Read: Kenya shilling falls to historic low against dollar“The over-valuation became obvious last year. Read: Kenya shilling to weaken furtherHe said the CBK had written to 10 main banks to explain why the spreads were so wide despite the interbank market reforms. “The tenor of swaps and Kenya shilling borrowing where non-resident banks are involved is limited to a tenor of not less than six months,” he said.

Source: Daily Nation October 25, 2023 15:08 UTC