RBI makes sales and purchases of foreign currency in the forex market, basically to even out lumpy demand or supply in the thin forex market; large lumpiness in demand is mainly on account of oil imports, leads and lags and external debt servicing on Government account. Such sales and purchases are not governed by a predetermined target or band around the exchange rate.
This would effectively safeguard the soundness, integrity, efficiency, and stability of the financial system in Kenya and the region. I believe SMART regulation is the way to go because its very architecture minimises regulatory burden, focuses on outcomes rather that processes, and applies regulatory measures in proportion to the risk profile of individual institutions.