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Shilling gains ground

By Racheal Nabisubi

Added 8th November 2017 03:32 PM

The shilling marginally gained against the dollar to trade at 3,629.92/ 3,639.92 buying and selling respectively.

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BUSINESS | RATES

The shilling was volatile in the early part of last week, but later stabiliSed as corporate and interbank demand fizzled out.

Trading was in the range of 3650/3660 last week.

The shilling marginally gained against the dollar to trade at 3,629.92/ 3,639.92 buying and selling respectively on Wednesday morning, up from Tuesday’s close of 3,635.07/3,645.07.

In the fixed income market, Treasury bond yields continued to drop. The two-year came out at 11.015%, while the five-year traded at 12.70%. BOU accepted 180 billion as targeted and the bond auction was oversubscribed.

In the regional currency markets, the Kenya shilling recovered from previous losses in the aftermath of the polls.

Stephen Kaboyo, a financial markets expert, noted that Inflows mainly from the horticulture rendered support for the shilling. Markets quoted the shilling at 103.65/85.

“In the coming days, the shilling is likely to come under renewed pressure as demand is expected to pick up mainly for interbank and importers,” he said.

In the international currency markets, the US dollar traded marginally lower amid a sense that Jerome Powell, the Fed Chair nominee was more dovish on monetary policy. In a similar manner, Wall Street that has been trading around a series of record highs, all slipped in modest.

“Forecast for the shilling indicate relative stability, with the market normalcy returning and anxiety dying down in Kenya markets. However, occasional pockets of demand could lead to marginal weakening,” Kaboyo added.

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