The shilling gained for the third straight day having stood at 100.51 units on Wednesday and 100.55 units Tuesday.
On Monday, the local currency traded at Sh100.74 to the dollar.
The shilling had slowly lost to the greenback from July 17 to Monday before assuming the upward trend from Tuesday.
The Kenya shilling continued gaining ground on Thursday to touch a mean rate of 100.49 units to the dollar buoyed by foreign inflows and official foreign exchange reserves.
Data from the Central Bank of Kenya (CBK) showed the currency gained for the third straight day having stood at 100.51 units on Wednesday and 100.55 units Tuesday. On Monday, the local currency traded at Sh100.74 to the dollar.The shilling had slowly lost to the greenback from July 17 to Monday before assuming the upward trend from Tuesday.
Market players noted there was some demand for the dollar from the telecoms and energy sectors on Wednesday but inflows were adequate to meet this.
“Demand from the telecommunication and energy sectors was sufficiently met by foreign currency inflows from various sectors of the economy,” said Commercial Bank of Africa in its Wednesday market report. On Tuesday bankers said fundamentals generally took a backseat as there was subdued trading on the shilling-dollar pair.
“Demand and supply factors remained the key drivers for the US dollar-Kenya shilling pair in yesterday’s [Tuesday] session as fundamental developments took a backseat, resulting in subdued trading action for the pair,” said CBA.
In the last few months, the shilling has benefited from huge dollar deposits in commercial banks, as well as ever-rising diaspora inflows that have been breaking records on a monthly basis. The strengthening also came against an increase in official foreign exchange reserves by an extra Sh1 billion last week.
The CBK last reported that the foreign exchange reserves stood at Sh891 billion at the end of last week compared to Sh890 billion in the previous week.
The forex position in commercial banks has been strengthening as a result of foreign currency deposits in banks which rose by an extra Sh73 billion in the 12 months to May to hit a total of Sh541 billion.
The shilling momentum began last week with the CBK saying there were dollar inflows from the tea sector as well as the offshore banks.
Even in the east African region, the shilling was stronger, said the CBK.
“In the EAC region, the Kenya shilling strengthened marginally against all currencies, except the Uganda shilling,” said the CBK weekly bulletin.
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