Central bank to mop up
03 July 2012, 08:09
Nairobi - Kenya's central bank sought to mop up 10 billion shillings ($118.8 million) via repurchase agreements after liquidity surged following the release of funds for the government's free education program.
The weighted average interbank interest rate fell nearly 200 basis points to 17.4 percent on Tuesday from the previous day on the back of the surge in liquidity.
The central bank has not mopped up liquidity since June 19. Its enhanced open market operations this year are designed to make it slightly more expensive for traders to fund long dollar positions in order to support the shilling currency.