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Shilling slightly weakens against dollar

By Racheal Nabisubi

Added 24th October 2017 03:58 PM

By yesterday, the local unit was trading at 3,650.29/3,660.29 buying and selling respectively against the dollar. This was slightly weaker than the morning session of 3,650/3,660.

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By yesterday, the local unit was trading at 3,650.29/3,660.29 buying and selling respectively against the dollar. This was slightly weaker than the morning session of 3,650/3,660.

BUSINESS | RATES

At the close of last week, the shilling registered a modest rebound from its earlier losses as demand receded.

However, in the early part of the week, the shilling was under immense pressure on account of strong demand from the interbank, as commercial banks rushed to cover their short positions.

Furthermore, significant demand was also seen from the energy, manufacturing and importers. Trading was in the range of 3645/3655.

However, by Monday, the local unit was trading at 3,650.29/3,660.29 buying and selling respectively against the dollar. This was slightly weaker than the morning session of 3,650/3,660.

A financial analyst and the Alpha Capital Partners boss Stephen Kaboyo noted that in the regional markets the Kenya shilling was under pressure due to concerns about the credibility of the repeat presidential election.

“The anxiety kept the markets on the edge. The Central Bank intervened and sold dollars in order to calm the markets. Trading was in the range of 103.45/50,” Kaboyo said.

In the international currency markets, he added that the dollar trimmed it's losses following the release of better than expected US data contained in Philadelphia manufacturing index report that highlighted continued strength in the US economy. 

At  Wall street, it was a landmark week as the Dow Jones index  hit an all-time high and touched the 23000 level, amidst remembrance of the Black Monday, 20years ago when the market plunged by 20%. The huge momentum seen this week was largely driven by bank and tech stocks.

“Forecast for the shilling indicate volatility as pockets of demand continue to play out coupled with an undercurrent of negative sentiment on account of domestic and regional political developments,” Kaboyo added.

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