The Kenyan shillings has maintained its resilience by holding strong against the US dollar according to last week’s data.
The Kenya Shilling appreciated by 0.7 percent against the US Dollar to close at 100.8 shillings to the dollar from 101.6 shillings the previous week due to increased diaspora remittances.
On a year-to-date basis, the shilling has gained 2.3 percent against the US Dollar with analysts still holding on the view that the shilling should remain relatively stable against the dollar in the short term, supported by:
- Stronger horticulture export inflows were driven by increasing production
- Improving diaspora remittances, which increased by 56.6 percent to USD 217.1 million in April 2018 from USD 138.6 million in March 2017, attributed to (a) recovery of the global economy, (b) increased uptake of financial products by the diaspora due to financial services firms, particularly banks, targeting the diaspora, and (c) new partnerships between international money remittance providers and local commercial banks making the process more convenient
- High forex reserves, currently at USD 9.0 billion (equivalent to 6.0 months of import cover) and the USD 1.5 billion stand-by credit and precautionary facility by the IMF, still available until September 2018
The local currency has continuously defied what some analysts had foretold about it at the beginning of 2018 saying that it would drop as low as 110 shillings to the dollar.
Ironically, during the first quarter of 2018, the shilling has continued to soar high, heating an all-time high of below 100 shillings to the dollar.