The local currency weakened, pausing an advance in the previous sessions that saw the currency on the gaining side. Markets players were seen earlier in the week reposition. The unit traded in the range of 3700/3710 during the week ending November 20, 2020.
In the fixed income segment of the market, yields slightly dropped underpinned by significant demand as institutional remained net buyers in the absence of other financial products while private sector credit remains at the lowest level. Yields printed at 7.558%, 9.621% and 12.502% respectively.
In the regional, the Kenya shilling hit a new historical low, trading at 109.20 signaling rising costs of imports amid a dim outlook for exports as a result of renewed lockdown in the European markets.
Global financial markets stalled as news that US Treasury was ending the emergency loans program dealt a blow to economic recovery hopes amidst a surge of COVID in all major world economies. The greenback was slightly weaker and the 10 year treasury yield slipped to the lowest in a fortnight.
“Outlook for the home unit indicates a downward trajectory will likely prevail with the economy heavily exposed to the disruptions caused by COVID 19 signaling economic contraction and large budget deficit,” says Stephen Kaboyo, an analyst and Managing Director at Alpha Capital Partners.