Shilling firms against the dollar on higher yields

The Kenyan shilling firmed against the dollar on Monday, benefiting from higher lending rates and exporters offloading their dollars in anticipation of further strengthening.

Stocks were down. At the 1:30PM close of trade, commercial banks posted the shilling at 103.05/15 per dollar, compared to Friday’s close of 103.90/104.10.

“There was a view that due to fundamental weaknesses in the economy, the shilling could weaken to 110. But now, that sentiment has charged, mostly because the central bank seems to be on top of its game,” said a trader with a leading commercial bank in Nairobi.

The trader said that dollar inflows have increased from foreign investors coming into the market to buy Kenyan treasuries.

The weighted average interest rate on the benchmark 91-day Treasury bill jumped to 20.637 percent at last week’s auction from 18.607 percent at the previous sale.

Traders said there was also little demand for dollars, as importers stayed on the sidelines expecting the shilling to firm further, while exporters sold their dollars to lock in their gains in the face of the strengthening.

On the Nairobi Securities Exchange, the main NSE-20 Share Index was down 25.24 points to close at 4084.36 points. Shares for the British-American Investments Company (Kenya) Limited fell to 15.75 shillings per share from 16.45.

“The whole market in general has been on a decline,” said a trader.

On the secondary market, government bonds valued at 498.9 million shillings were traded, up from 339.2 million last Friday.

Want to send us a story? Submit on Wananchi Reporting on the Citizen Digital App or Send an email to wananchi@royalmedia.co.ke or Send an SMS to 25170 or WhatsApp on 0743570000

Leave a Comment

Comments

No comments yet.

latest stories