Shilling loses 0.47% in mid-morning trading
May 21, 2013
The shilling depreciated 0.47% against the greenback as demand continues to outstrip supply, trader’s note that the trend may carry on through the week.
By Samuel Sanya
The shilling depreciated 0.47% against the greenback as demand continues to outstrip supply, trader’s note that the trend may carry on through the week.
Faisal Bukenya, the head of market making at Barclays Bank notes that high demand from oil and manufacturing sectors coupled by high inter-bank rates have seen the shilling lose some gound.
The local unit was trading at 2,574/2,584 buying and selling respectively at most commercial banks at noon on Monday from 2,562/2,572 increasing the cost of imports.
Hitherto, the shilling had traded flat most of last week in a very tight range of 2560/70 held down by weak demand as most corporates were out of the market due mid-month tax obligations.
Stephen Kaboyo, the Alpha Capital partner’s boss pointed out that the mid-week Treasury bill auction saw yields on three month paper drop by 170 basis points while the six month and one year went up marginally but did little to attract offshore investors.
“Yields on government securities came out mixed with the 91 day paper registering a sharp drop of 190 basis points to 9.31% while the 182 and 365 bills inched up to 11.06%, 12.06% respectively,” the standard chartered bank research team said.