Shilling Holds Stability Against US Dollar to Close May at Ksh. 101.4

By Korir Isaac / June 3, 2019



The Kenyan Shilling Dollar Turnover Kenyan Shilling

The Kenya Shilling remained stable against the US Dollar for the second consecutive month to close at 101.4 shillings in May.

The performance remained unchanged from the previous month with inflows from diaspora remittances and offshore investors offsetting end month dollar demand from oil and merchandise importers.

During the first week of June, the Kenya Shilling depreciated by 0.1 percent against the US Dollar to close at 101.4 shillings from 101.2 the previous week, driven by increased dollar demand from merchandise and oil importers buying dollars to meet their end-month obligations.

SEE ALSO: Equities in May Fall but Regains Positive Performance in Week 1 of June

On a YTD basis, the shilling has appreciated by 0.5 percent against the US Dollar in addition to 1.3 percent in 2018.

According to Cytonn Investments Weekly Report, the shilling should remain relatively stable against the dollar in the short term.

The stability will be supported by the narrowing of the current account deficit with data on balance of payments indicating continued narrowing to 4.5 percent of GDP in the 12-months to April 2019, from 5.5 percent recorded in April 2018.

The decline has been attributed to the resilient performance of exports particularly horticulture and coffee, strong diaspora remittances, and higher receipts from tourism and transport services. Growth of imports also slowed mainly due to lower imports of food,

Consecutively, improving diaspora remittances, which have increased cumulatively by 3.8 percent in the Q1’2019 to 665.6 million dollars, from 641.5 million recorded in a similar period of review in 2018 will support the shilling’s resilience.

SEE ALSO: Real Estate Records Increased Activity in the Residential Sector in May

The improved diaspora remittance is due to a rise in uptake of financial products by the diaspora due to financial services firms, particularly banks, targeting the diaspora.

Also, the increase was supported by new partnerships between international money remittance providers and local commercial banks making the process more convenient.

CBK’s supportive activities in the money market, such as repurchase agreements and selling of dollars is also set to support the shilling’s stability.

READ: May in Focus: T-Bills Registered an Overall Under-subscription

With high levels of forex reserves, the shilling will no doubt hold its strength. Currently, the forex reserves stand at an all-time high of 10.1 billion dollars – equivalent to 6.4-months of import cover – above the statutory requirement of maintaining at least 4-months of import cover, and the EAC region’s convergence criteria of 4.5-months of import cover.



About Korir Isaac

A creative, tenacious, and passionate journalist with impeccable ethics and a nose for anticipated and spontaneous news. He may not say it, but he sure can make one hell of a story.

View other posts by Korir Isaac


More Articles From This Author








Other Related Articles










SOKO DIRECTORY & FINANCIAL GUIDE

ARCHIVES

2019
  • January 2019 (256)
  • February 2019 (216)
  • March 2019 (285)
  • April 2019 (254)
  • May 2019 (272)
  • June 2019 (251)
  • July 2019 (340)
  • August 2019 (293)
  • September 2019 (171)
  • 2018
  • January 2018 (291)
  • February 2018 (219)
  • March 2018 (278)
  • April 2018 (225)
  • May 2018 (238)
  • June 2018 (178)
  • July 2018 (257)
  • August 2018 (249)
  • September 2018 (256)
  • October 2018 (287)
  • November 2018 (284)
  • December 2018 (187)
  • 2017
  • January 2017 (183)
  • February 2017 (195)
  • March 2017 (207)
  • April 2017 (104)
  • May 2017 (169)
  • June 2017 (205)
  • July 2017 (190)
  • August 2017 (195)
  • September 2017 (186)
  • October 2017 (235)
  • November 2017 (253)
  • December 2017 (266)
  • 2016
  • January 2016 (165)
  • February 2016 (165)
  • March 2016 (190)
  • April 2016 (143)
  • May 2016 (246)
  • June 2016 (183)
  • July 2016 (271)
  • August 2016 (249)
  • September 2016 (234)
  • October 2016 (191)
  • November 2016 (243)
  • December 2016 (153)
  • 2015
  • January 2015 (1)
  • February 2015 (4)
  • March 2015 (166)
  • April 2015 (109)
  • May 2015 (117)
  • June 2015 (121)
  • July 2015 (150)
  • August 2015 (157)
  • September 2015 (188)
  • October 2015 (170)
  • November 2015 (174)
  • December 2015 (208)
  • 2014
  • March 2014 (2)
  • 2013
  • March 2013 (10)
  • June 2013 (1)
  • 2012
  • March 2012 (7)
  • April 2012 (15)
  • May 2012 (1)
  • July 2012 (1)
  • August 2012 (4)
  • October 2012 (2)
  • November 2012 (2)
  • December 2012 (1)
  • 2011
    2010
    2009
    2008
    2007
    2006
    2005
    2004
    2003
    2002
    2001
    2000
    1999
    1998
    1997
    1996
    1995
    1994
    1993
    1992
    1991
    1990
    1989
    1988
    1987
    1986
    1985
    1984
    1983
    1982
    1981
    1980
    1979
    1978
    1977
    1976
    1975
    1974
    1973
    1972
    1971
    1970
    1969
    1968
    1967
    1966
    1965
    1964
    1963
    1962
    1961
    1960
    1959
    1958
    1957
    1956
    1955
    1954
    1953
    1952
    1951
    1950