Kenya Shilling will Remain Relatively Stable in the short term – Cytonn Report

By Amina Faki

The Kenya shilling retracted against a basket of international and regional currencies.

The performance of the shilling has been consistently on the receiving end against its peers and major global currencies for the past week.

Against the dollar, the shilling shed marginally 0.11 percent to close at 103.95 from 103.8 shillings the previous week due to increased dollar demand by food and oil importers.

According to Cytonn Investments, the shilling depreciated against the dollar, the pound and the euro by 1.3 percent, 6.3 percent and 10.56 percent on a year to date basis respectively.  

The performance of the shilling will remain relatively stable in the short term, noted Cytonn Investments.

The Cytonn weekly report added that the stability of the shilling will be supported by:

1. the forex reserve level currently at  7.9 billion US Dollars equivalent to 4.6 months of import cover

2. The IMF precautionary credit facility of 1.5 billion US Dollars equivalent to 1.0 more month of import cover) that Kenya can utilize to stabilize the shilling in case of adverse movement in the forex market.