Kenyan Shilling Maintains Resilience against the US Dollar

During the week, the Kenyan Shilling gained by 0.3 percent against the US Dollar to 99.7 shillings, the strongest level since 3^rd July 2015, from 100.0 shillings the previous week.

The Kenya Shilling’s performance was supported by ample dollar supply from offshore portfolio investors buying government debt amid weak dollar demand from the energy sector.

The Kenya Shilling has appreciated by 2.1 percent year to date with analysts from Cytonn Investments, the shilling should remain relatively stable to the dollar in the short term.

RELATED

• Shilling Slightly Dips Against The Dollar But Still Resilient
• Kenya Shilling Sustains Resilience Against The US Dollar

The shilling will be shielded by the narrowing of the current account deficit to 5.1 percent in the 12-months to November 2018, from 6.5 percent in November 2017, attributed to improved agriculture exports, increased diaspora remittances, strong receipts from tourism, and lower food and SGR-related equipment relative to 2017.

The shilling will also enjoy the improving diaspora remittances, which increased by 38.6 percent in 2018 to USD 2.7 billion from USD 1.9 billion recorded in 2017.

READ Kenyans’ Diaspora Remittance for 2018 Grew by 39% to 274.37 Billion Shillings

The CBK’s activities in the money market, such as repurchase agreements and selling of dollars, and high levels of forex reserves, currently at USD 8.2 billion, equivalent to 5.4-months of import cover, compared to the one-year average of 5.1 months will cover the shilling.