The local currency traded at 99.85 buying and 100.1056 selling at the opening of the markets on Tuesday morning.
The CBK said there have lately been foreign exchange inflows from the agricultural sector as well as from overseas investors.
Market watchers said the strengthening of the local unit was expected to continue given the plentiful supply of the greenback.
The Kenyan shilling strengthened further on Tuesday to a 34-month high, hitting a mean of 99.9778 units to the dollar whose supply has increased in recent days.
The Central Bank of Kenya (CBK) data showed the local currency traded at 99.85 buying and 100.1056 selling at the opening of the markets in the morning.
In its weekly bulletin covering the financial markets, the CBK said there have lately been foreign exchange inflows from the agricultural sector as well as from overseas investors.
The CBK, however, did not explain what subsectors were involved or what type of investment had brought in the dollars.
Market watchers said the strengthening of the local unit was expected to continue given the plentiful supply of the greenback.
“Further appreciation of the home unit seems plausible in the interim as market continues to witness a demand-supply mismatch,” said Commercial Bank of Africa in its market report Tuesday morning.
CBA said the shilling was on a winning run as the bankers had predicted earlier.
The momentum was observable since late last week and continued on Monday and Tuesday. CBA said in actual intra-day trading for Monday, the buying price for the dollar went as low as 99.20 units while selling stood at 100.70.
“Key counters were muted in early trading, with the pair holding around 99.20-100.70 level. A slight uptick in foreign currency supply in the afternoon period saw the local unit pluck some 10 cents off the USDKES currency pair,” said CBA.
The last time that the shilling went below 100 units to the greenback was on July 6, 2015.
In a separate report, news agency Reuters said the shilling was benefiting from a steady inflow of the greenback from foreign construction companies selling dollars, thereby matching demand from merchant importers.
By 10am Tuesday, the agency said that commercial banks were quoting the shilling at 99.90/100.00 units – which, according to their data, was unchanged from Monday’s close.
That means the agency’s data showed the shilling was actually stronger than what was indicated by the CBK data (showing 99.9778 units to the dollar) and that the strengthening had started in the late afternoon of the previous day (Monday).
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