Kenyan currency Wednesday traded at 102.94 units buying and 103.14 selling to the greenback.
The shilling strengthened to a five-week high of below 103 units to the dollar in Wednesday’s trading backed by international weakening of the US currency and release of the greenback by local companies.
The Kenyan currency was trading at an average of 102.94 units buying and 103.14 selling to the dollar at the opening of markets as some big companies cashed their dollar stocks to meet commitments such as tax payments.
Banks were also rushing to meet cash reserve ratio requirements, set at 5.25 per cent of their total deposits.
“We have seen the shilling appreciating recently. Today we saw it touch below Sh103 to the dollar because there was scarcity of liquidity in local currency. Banks are also meeting their cash reserve requirements and there is also the payment of taxes,” said a foreign exchange trader in a commercial bank who declined to be quoted to enable him speak candidly.
In a commentary after end of trading on Tuesday, the Commercial Bank of Africa said the dollar has been rising. The bank said that there were corporate and interbank dollar supplies in late trading with the shilling being quoted at 102.60 by close of Tuesday.
CBA said the shilling was strengthening against the dollar as foreign currency supply outdid demand.
“After holding steady for most of the day, the home unit inched up on the back of corporate and interbank dollar supply in late trading to close the day quoted at the lower bands of the 102.60 –104.00 level,” said CBA.
The bank sees the shilling strengthening further. “We see the local currency range-bound in the near term as foreign currency buyers and sellers continue to battle for dominance in the local forex market,” said CBA. Yesterday, some banks quoted an average of 102 units to the dollar while others traded at an even lower level.
Bank of Africa, on its website, quoted 99.80 buying and 105.20 selling against the dollar. Commercial Bank of Africa was buying at 97.75 and selling at 104.60.
The Central Bank of Kenya showed that the shilling opened selling at 103.0361 to the dollar, but the local currency appreciated in the course of trading.
Forex dealers said the shilling was likely to remain under pressure, adding that liquidity in the money markets was bound to remain tight in the days to come.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
