CBK steps in to mop up Sh15 billion

THE Central Bank yesterday sought to mop up Sh15 billion from the market.The bank has been actively using repurchase agreements (repos) and term auction deposits since last year to soak up commercial banks' liquidity and support the shilling against the dollar.

The shilling firmed against the dollar lifted by the Central Bank's tight squeeze on availability of the local currency, which has seen market interest rates edge higher. At 0718 GMT, commercial banks quoted the shilling at 87.35/55 to the dollar, stronger than Friday's close of 87.45/65. "The high cost of inter-bank funding is discouraging holding long dollar positions," said John Muli, a trader at African Banking Corporation.