The Kenyan shilling is set to strengthen further against the United States Dollar in the next couple of days to Thursday next week as traders exuded confidence in the forex market.
According to Reuters, the shilling was broadly stable for a better part of the week and was expected to gain slightly in the coming week.
As of Thursday, September 12, commercial banks quoted the shilling at 128.50/129.50 per dollar, compared with 128.25/129.25 at last Thursday’s close.
“We’re stuck within this range. The shilling has reached a stable zone,” noted an analyst who spoke to the publication.
Kenyan shilling notes and coins
Photo
SMG
However, the traders revealed that the local currency would retain its current levels for the next few days before stabilising further.
This was mainly attributed to a surging demand for the dollar by the oil importers and corporates.
“We’re seeing some increased dollar demand from oils and corporates, but generally we’re stuck within a range. It is likely to stay that way for the next few days,” noted another expert.
The forecast comes barely a fortnight after the local currency weakened slightly against the greenback due to increased demand for the US currency by manufacturers and importers.
Kenya’s currency also slipped as a result of the downgrade by Moody’s, a global credit ratings agency which pushed Kenya’s sovereign rating deeper into junk territory, citing the country’s inability to deal with its bulging debts.
Moody’s downgraded the country’s credit ratings to “Caa1” from “B3” and projected Kenya’s debt affordability to remain weaker for longer.
The local unit rallied strongly early this year after the government resorted to repaying Ksh310 billion ($2 billion) Eurobond that matured in June this year.
The drastic gains by the shilling were also attributed to the oversubscription of the infrastructure bonds issued by the central bank in February.
A man counting several one thousand Kenyan shillings bills.
Photo
Wilberforce Okwiri
