The Kenya shilling has remained firm partly as the balance of payments (BoP) deficit narrowed in the wake of falling crude oil in the international market. The deficit has fallen from 10 per cent to 8 per cent in recent times. PHOTO | FILE
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The shilling has remained firm partly as the balance of payments (BoP) deficit narrowed in the wake of falling crude oil in the international market. The deficit has fallen from 10 per cent to 8 per cent in recent times.
The Kenyan shilling strengthened to its highest level in nine months Tuesday as poor demand for dollars spurred a greenback sell-off by banks and non-governmental organisations.
AT 1040 GMT, commercial banks posted the shilling at 100.80/90, up from 101.05/15 at the close of Friday. Traders said the shilling was likely to trade in a narrow band of 100.50-101.20 over the next few days.
The shilling has remained firm partly as the balance of payments (BoP) deficit narrowed in the wake of falling crude oil in the international market. The deficit has fallen from 10 per cent to 8 per cent in recent times.
“Developments in the foreign exchange market are supported by a narrowing current account deficit with improved exports, strong diaspora remittances, and a lower oil import bill,” said Central Bank of Kenya in its last Monetary Policy Committee meeting where the policy rate was retained at 8.5 per cent.
It has also been supported by huge forex reserves held by the CBK.
Last week it stood at 4.96 months of import cover up from previous week’s 4.92.In the same week it also gained on the Tanzania shilling and Burundi Franc but weakened against the Uganda Shilling and Rwanda Franc.
—Additional reporting by Reuters
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