Wednesday, May 22, 2024
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Shilling Weakens Slightly Against Dollar

The local currency weakened slightly against the dollar after opening the week relatively flat. Mid week market activity resulted in uptick in demand mainly driven by corporate players and interbank . Week closing quotes were at 3670/80 compared to opening levels of 3665/75.

In the fixed income segment, a bond auction for a 2 and 15 year with 285 billion amount on offer was held. Coupon rates stood at 11.00% and 14.250% respectively, trading was at yields of 14.000% and 15.145%. Both tenors were oversubscribed.

In regional currency markets, the Kenya shilling was on the back foot due to increased end month from multinational companies and merchandise importers. Trading was in the range of 101.25/45.

In the global markets, the US dollar rose to its highest level in three months against other major currencies supported by strong manufacturing data that showed accelerated activity that set a 3 year record. This gave an upbeat outlook and a strong indication that the US economy was showing no signs of losing steam amid the coronavirus effects.

In Britain, the pound plunged to a record low as the greenback broad based strength swept away its recent gains.

“Outlook for the local unit indicates a stable shilling deriving much of its support from expected end month flows from charities and renewed interest from portfolio investors,” says Stephen Kaboyo, an analyst and Managing Director at Alpha Capital Partners.

Taddewo William Senyonyi
William is a seasoned business and finance journalist. He is also an agripreneur and a coffee enthusiast.

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