Shilling weakens on end-month dollar demand, stocks up
The local currency is down 9 per cent against the dollar so far this year. PHOTO | FILE
What you need to know:
The local currency is down 9 per cent against the dollar so far this year.
The Shilling weakened on Monday as importers bought dollars to meet their end month requirements, while stocks rose.
At close of trade, commercial banks quoted the shilling at 98.60/70 to the dollar versus Friday's close of 98.40/50.
"A few last-minute orders put some pressure on the local currency one day before the month's end," said one trader from a major commercial bank in Kenya.
The trader said the currency is likely to hover between the 98 and 99 levels over the course of the week.
"It looks like the central bank is not happy with the shilling going above 99," the trader said, adding the perception was helping to create a psychological barrier at the 99 level that will support the shilling.
The central bank has come into the market to mop up excess liquidity during five of the last six trading sessions, making it expensive to bet against the shilling.
The shilling is down 9 per cent to the dollar so far this year, undermined by a gaping current account deficit and sluggish earnings from key foreign exchanger earner tourism due to a spate of attacks blamed on Islamist militants from Somalia.
On the Nairobi Securities Exchange, the main NSE-20 Share Index was up 27.22 points to close at 4,837.58 points.
Among the gainers were telecoms firm Safaricom the bourse's biggest stock by market capitalisation, which gained Sh0.20 to close at 16.30 per share.
