The Kenya Shilling remained stable during the week, to close at 103.9 shillings against the dollar cites Cytonn Investments investor brief note.
On a year to date basis, the shilling has depreciated against the dollar by 1.4 percent from 1.3 percent the previous week.
USD vs KES Exchange Rate
The performance of the shilling was mainly driven by
The dollar demand by oil importers
Inflows from horticulture
Interbank rate increased
Volumes traded decreased
Central Bank was relatively active in the reverse repo market
Foreign reserves held at CBK continued its decline for the 12th consecutive weekly session, falling by USD 88Mn to end at USD 7.78Bn.
“The slide reflects the central bank efforts in shoring the local unit by market sale of greenbacks.” Genghis Analysts.
According to Cytonn Investments, the shilling should remain relatively stable in the short term, supported by CBK’s activity as can be seen by the decline in the forex reserve levels, currently at 7.8 billion US dollars (equivalent to 4.6 months of import cover), compared to 8.3 billion US dollars (equivalent to 5.3 months of import cover) at its peak, at the end of May 2017.
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