Market News

Higher USD inflows help shilling gain

The shilling traded at an average of 103.70 last Friday. FILE PHOTO | NMG 

The shilling closed on a stronger footing against the dollar on Friday as inflows and a liquidity mop up balanced out greenback demand from importers.

Commercial banks traded the shilling at an average of 103.70 on Friday afternoon, compared to Thursday’s closing average of 103.83 units. The currency had touched a weekly low of 103.91 to the dollar on Wednesday.

“The home unit was on a bearish trajectory in early trading as dollar demand from corporate players inundated the market. However, the shilling reversed its losses as dollar sellers emerged from the shadows to take advantage of the perceived good price,” said Commercial Bank of Africa in a treasury market note.

Eyes will be on the September 30 demonetisation deadline for the old Sh1,000 note, which analysts at Sterling Capital have warned risks raising demand for dollars, and those already holding hard currency becoming reluctant to part with it.