By George Obulutsa
NAIROBI (Reuters) - The fundamentals of Kenya's economy and the shilling's exchange rate are sound and the local currency's movements are due to events in international markets, the central bank said on Monday.
"The current movements in the shilling against other currencies are as a result of international market developments not related to Kenya," the bank said in a statement.
"While the shilling is weakening against the dollar, it is strengthening against the euro locally. This reiterates that fundamentals of Kenya exchange rate and the economy are sound".
On Monday, the shilling hit a new five-year low, touching 82.20/30, due to rising risk aversion globally and increased demand for the dollar and perceived pre-budget jitters.
Central bank said its policy stance on the shilling's exchange rate -- meant to absorb any external shocks to the economy -- was unchanged.
"Once the volatility in the international market is stabilised and uncertainty in the euro zone is resolved, the shilling will rediscover its path consistent with the fundamentals," it said.
