The shilling remained relatively stable on Wednesday following the victory of Donald Trump in US elections that occasioned a sharp, one-day rally of the dollar against major world currencies.
Live foreign exchange data showed that the Kenyan shilling remained steady at around Sh129 to the US dollar. It was not clear whether the Central Bank of Kenya (CBK) had intervened to maintain the local currency’s trading at that level.
Major currencies around the globe, including the Euro, the British Pound, Japanese Yen and the Chinese Yuan all recorded a sharp drop against the dollar during the rally that began once the Republican candidate’s victory became apparent on Wednesday morning East African time.
The dollar had gained by a sharp 1.29 percent against the Pound by last evening, while the Euro dropped by 1.83 percent against the dollar, and the Japanese Yen and Chinese Yuan declined 1.69 percent and 1.07 percent respectively against the greenback.
“Globally, yes the dollar is strengthening because Trump’s win is considered good for the economy,” a global markets analyst told Business Daily.
“He has always been pro-business and soft on taxation so his leadership is considered to be good for companies and that’s why markets are responding.”
The shilling, on the other hand, recorded a slight gain against the dollar, by Sh0.05 or 0.02 percent, reflecting a defiance of the global trend following the appreciation of the world’s most used currency.
The analyst, who requested to remain anonymous for fear of reprisal, said the shilling has remained steady because “we have a lot of inflows also coming into our market, so that has helped the shilling to remain strong under the level of Sh130.”
“But I think at around that level of Sh129, the CBK is also a buyer of dollars, so I think that level holds for now and that has also prevented the shilling from strengthening even further.”
The Kenyan shilling’s peer currencies, including the Tanzanian and Ugandan shillings, the Nigerian Naira, and the South African Rand, have all felt the heat of the dollar rally, with each depreciating by at least 0.2 percentage points against the US dollar.
