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XINHUA NEWS SERVICE REPORTS FROM THE AFRICAN CONTINENT

 
Kenya shilling slides weighed by high
dollar demand, political uncertainty

NAIROBI (Xinhua) -- The Kenya shilling weakened on Wednesday slightly pulled down by sustained U.S. dollar demand from retail importers.

The shilling closed Wednesday at an average of 102.9, a decline from the previous session as a tough political climate in the East African nation too weighed down on the currency.

The Central Bank of Kenya (CBK) quoted the currency at 102.89 after losing from 102.70 on Tuesday, with the shilling gravitating towards the 103 mark.

Commercial banks, on the other hand, put the value of the shilling to the dollar at between 102.80 and 103.0, as traders cited an increase in dollar demand from oil importers.

The demand had outweighed inflows from various sectors including horticulture, thus putting pressure on the shilling which is also being burdened by political uncertainty in the East African nation.

Against the British pound, the shilling also weakened to trade at 136.40 on Wednesday from the previous day’s 135.5.

However, even as the shilling faces pressure, Kenya has strong forex reserves position to cushion the local unit. Central Bank data indicated Wednesday that the reserves stand at 7.5 billion dollars or an equivalent to five months of import cover.

While they have been on the decline from 8.3 billion dollars where they peaked in April, the decline is not worrying level, according to analysts.

SEE ALSO:

Kenya shilling sustains positive growth amid tough political climate

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Kenya shilling strengthens despite intense political bickering

NAIROBI, (Xinhua) -- The Kenya shilling strengthened against the U.S. dollar on Monday as the market weathered political bickering over fresh presidential polls scheduled for Oct. 17.

The shilling traded against the dollar at a high of 102.8, a gain from 103.00 at the end of last week.

The Central Bank of Kenya (CBK) on Monday placed the value of the local unit at 102.89, which was a rise of 0.34 percent from the over 103.00 last week.

On the other hand, commercial banks quoted the value of the shilling against the dollar at between 102.75 and 102.85 as traders noted the currency would continue to hold steady due to rise in dollar inflows.

On Monday, however, as the shilling steadied against the dollar, it weakened against the British pound by 0.85 percent to close at 135.85.

The Kenya shilling appreciated against the dollar by 0.1 percent last week to close at 103 from 103.1 the previous week, primarily due to dollar inflows from foreign investors to the local equity and debt markets.

“In our view, the shilling should remain relatively stable to the dollar in the short term, supported by CBK’s activity as they have sufficient forex reserves, currently at 7.5 billion dollars (equivalent to 5.0 months of import cover), but we have seen the reserves decline significantly from 8.3 billion dollars at the peak in April this year, but not to a worrying level, as import cover currently stands at five months,” Cytonn, a Nairobi-based investment firm, said in a report Monday.

           

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