(Bloomberg) -- Kenya should issue local-currency debt outside the country to check depreciation of the shilling, rather than managing the unit, its Capital Markets Authority said.
The International Monetary Fund reclassified the shilling from “floating” to “other managed arrangement” in October to reflect the currency's limited movement due to periodic central bank interventions, saying the unit was overvalued by about 17.5 percent.
“There are opportunities for Kenya to consider adopting alternative and complimentary measures,” the CMA said in a report. “That is, raising capital in local currency, both in onshore markets where governments can tap local institutional investors and in offshore markets where they have greater access to a global investor base to curb a likely depreciation of the Kenya shilling.”
Click here to read more on the IMF's assessment of the Kenyan economy
The shilling was Africa's best performing currency last year, having gained 1.2 percent against the dollar, according to data compiled by Bloomberg.
To contact the reporter on this story: Adelaide Changole in Nairobi at achangole2@bloomberg.net
To contact the editors responsible for this story: David Malingha at dmalingha@bloomberg.net, Helen Nyambura, Robert Brand
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