Wednesday, November 25, 2020
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Currencies

Shilling Nurses Losses As Demand For Dollars Surges Ahead Of Festive Season

The local unit nursed losses as demand surged early in the week mainly from the corporate sector. At the close of the week, pressure had eased with quotes on both counters holding 3705/3715.

In the fixed income market, government securities yields marginally dipped on the short end of the curve, while at the one year curve the yield edged up. Yields printed at 7.011%, 7.000% and 12.400%.

The instruments maintained their appeal in the absence of alternative assets in the market.

In the regional currencies, the Kenya shilling was seen strengthening as commercial banks were positioning for a new reserve maintenance cycle . The currency held at 108.40/60.

In Tanzania, the shilling held steady as fox flows from agricultural sector improved supply conditions. Trading was in the range of 2315/20.

In the global markets, the dollar ticked higher, easing off a seven week low as hope for Covid aid package ahead of US elections faded and infections surged giving a slight bid to safe have assets. In other currencies, the Euro maintained a strong tone with market expectations that ECB will have no choice but to lower interest rates, while in Britain the sterling was stable on Brexit optimism.

“In the coming weeks, the shilling is expected to soften as typical surge in demand in last quarter of the year gains traction as importers place Xmas and end of year orders,” says Stephen Kaboyo, an analyst and Managing Director at Alpha Capital Partners.

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Taddewo William Senyonyi
https://www.facebook.com/senyonyi.taddewo
William is a seasoned business and finance journalist. He is also an agripreneur and a coffee enthusiast.

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