Markets & Finance

Kenya shilling rises to a six-month high

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The shilling rose to a six month high against the US dollar in early trading on Tuesday morning as the currency market reacted positively to the peaceful conclusion of the presidential poll contest.

The shilling rose to a six month high against the US dollar in early trading on Tuesday morning as the currency market reacted positively to the peaceful conclusion of the presidential poll contest.

CBK listed the shilling at an indicative rate of 84.98 units to the dollar, the first time the shilling touched the 84 levels since October 8, 2012 when it closed at 84.91 to the dollar.

The local unit closed at a mean of 85.63 to the dollar on Thursday as the country went into the Easter weekend which was highlighted by the eagerly awaited Supreme Court decision on the Presidential petition.

The Supreme Court ruled that the election of Mr Uhuru Kenyatta as the fourth President of Kenya was valid, and according to analysts the peaceful aftermath of the petition has helped set a good mood for the currency market.

“The market has taken this conclusion very positively. Going forward we are closely watching how much the offshore investors are bringing in and what areas of the economy they will put their money into,” said Mr Stephen Lagat, head of trading at CFC-Stanbic.

He said that CFC-Stanbic opened trading in the morning at 85.00/20 levels, and later the local unit strengthened by mid morning to trade at 84.55/75 levels.

Mr Lagat however said that the shilling is not projected to run to 83 levels in the short term, given that the currency market is mainly driven by inflows.

ABC Bank opened at 84.90/85.30, and said in a morning note to clients that the shilling is expected to gain this week after investors had let go of dollars from Thursday due to the speedy resolution of the petition, as well as declining end month demand.