Kenyan shilling seen mixed closing at 103.13/35 per dollar

The Kenyan shilling traded in a tight range against global and regional currencies to close the week at  103.13/35 per dollar on Friday.

The KES weakened 0.28 percent and 0.40 percent against the dollar and Euro respectively but recorded 0.51 percent gains against the Sterling.

On a year to date basis, the shilling has depreciated against the dollar by 0.8 percent.

This comes against mid-week’s Fed FOMC meeting which held the benchmark rate at 1.25 percent to 1.50 percent and announced the unwinding of Fed’s $4.5 trillion balance sheet.

This saw the dollar rally against its global peers with the pound and euro easing 0.7 percent and 0.9 percent against the dollar, respectively.

On the local front, KES gained 0.09 percent against the Ugandan Shilling while losing out 0.19 percent to Tanzania Shilling.

According to Cytonn Investments, the shilling should remain relatively stable to the dollar in the short term, supported by both the weakening of the USD in the global markets and the CBK’s activity as they have sufficient forex reserves, currently at USD 7.5 bn (equivalent to 5.0 months of import cover).

“However, we have seen forex reserves decline significantly from USD 8.3 bn at the peak in April this year, but not to an alarming level, as import cover currently stands at 5.0 months.”