Kenyan shilling holds steady, cushioned by remittance inflows
Money sent home by Kenyans living abroad is one of the country's main sources of foreign exchange. PHOTO | FILE
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Kenya received remittances worth $1.06 billion in the first nine months of this year, compared with $951 million in the same period in 2013, according to central bank data.
Kenya's shilling held steady against the dollar on Tuesday, with remittances from Kenyans abroad offsetting dollar demand from corporates. The shilling was quoted at 90.60/70 to the dollar at 0700 GMT, unchanged from Monday's close.
"We've been seeing more corporate demand (for dollars) as companies make final orders ahead of the Christmas break. But as we approach the Christmas break we also see improved (dollar) flows coming in from Kenyans' overseas," said Duncan Kinuthia, head of trading at Commercial Bank of Africa.
Money sent home by Kenyans living abroad -- or remittances -- is one of the country's main sources of foreign exchange.
Kenya received remittances worth $1.06 billion in the first nine months of this year, compared with $951 million in the same period in 2013, according to central bank data.
Central Bank said on Tuesday it planned to mop up Sh10 billion ($110.50 million) in excess liquidity from the money market. By absorbing excess liquidity, the bank makes it relatively more expensive to hold long dollar positions, which lends support to the shilling.
The shilling has hovered in recent weeks around three-year lows, due in part to dollar demand from importers, prompting interventions by the central bank, the latest being last week.
A fall in tourist numbers - another key source of hard currency inflows for east Africa's biggest economy - following a number of Islamist attacks in the country has put pressure on the shilling, which has lost about 5 per cent against the dollar this year.
-Reuters-
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