Banks bought the dollar at 100.70 units and sold it for 100.90 in early trade, the highest since the 100.65/85 opening level last Wednesday. FILE PHOTO | NMG
The local currency strengthened slightly against the US dollar on Wednesday despite recent drop on news the IMF will not be renewing the $989.8 million (Sh99.81 billion) insurance for the shilling.
Banks bought the dollar at 100.70 units and sold it for 100.90 in early trade, the highest since the 100.65/85 opening level last Wednesday.
The shilling is set to hold its ground against the US dollar in the near-term supported by increased hard currency flows from the diaspora, foreign direct investments and repatriation of cash stashed abroad, experts say.
The local currency strengthened slightly against the US dollar on Wednesday despite recent drop on news the IMF will not be renewing the $989.8 million (Sh99.81 billion) insurance for the shilling. Banks bought the dollar at 100.70 units and sold it for 100.90 in early trade, the highest since the 100.65/85 opening level last Wednesday.
The expiry of the IMF standby loan, which was to be tapped in case of immense pressure from external shocks such as high imports and foreign debt repayments, saw the shilling cross the 101 level for the first time since June.
The unit has been recording marginal but steady gains on the dollar since Monday, partly boosted by foreign investors buying into government securities and the Central Bank of Kenya mopping up excess liquidity.
“We looked at it (last Thursday’s depreciation of the shilling against the dollar) as a knee-jerk reaction by some corporates because it had no direct impact on real demand and supply in the market. It had no depth, it couldn’t run for very long,” a forex dealer at one of the leading investment banks said on Tuesday by phone. Traders expect dollar inflows from the diaspora, exports, and Kenyans wiring back cash stashed abroad to outweigh net outflows.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
