Central Bank of Kenya governor Patrick Njoroge has complained that some foreign exchange traders have “misunderstood” the institution plan to purchase $400 million from banks in the period to June. Other have taken malicious advantage of the monetary authority’s programme to cause volatility for their own benefit.
Dr Njoroge is repeating a CBK refrain from the 2011 and 2015 currency crisis when forex traders were accused of wreaking havoc to the market by taking advantage of a macroeconomic situation that did not favour the shilling.
Traders normally observe the activities and intentions of various actors in the market, both locally and globally, to make their purchases or sales and that is how they make money for the firms they work for.
If there is anything illegal in the business they are doing, then the CBK should not be announcing to the world that its activities and intentions are being taken advantage of, but it should be taking action against the culprits.
We should be hearing from the Central Bank that such and such an institution or individual has been penalised for having acted against the law.
In the past, we have seen the CBK act when it had evidence of those who had violated trading regulations and that is what it should do even now.