The Kenyan Shilling on Monday continued on the stability path against the dollar opening the week on almost the same level it closed on Friday.
Data from the Central Bank of Kenya showed that the shilling traded at Ksh128.50/129.50 for the buying and selling respectively.
The Shilling strength was bolstered by the inflows from tea exports that matched the month-end importer demand.
The CBK also attributed the fall in oil prices to be a contributing factor towards Shilling cementing its position.
A photo collage of Central Bank of Kenya governor and shilling notes and coins
Photo
CBK
The above was largely aided by a ceasefire in the Middle East between Israel and Lebanon.
‘’International oil prices declined during the week ending September 26, mainly driven by calls for a ceasefire between Israel and Lebanon. The price of Murban oil decreased to USD 72.64 on September 26, from USD 75.35 on Sep 19, 2024,’’ CBK shared in a statement.
The value of the Shilling was also attributed to the adequacy of the liquidity in the money market.
This was mainly attributed to commercial banks reporting excess reserves that stood at Ksh 12.4 billion.
‘’Liquidity in the money market remained adequate during the week ending September 26, supported by open market operations. Commercial banks’ excess reserves stood at KSh 12.4 billion in relation to the 4.25 percent cash reserves requirement (CRR).’’ CBK shared.
Traders, however, indicated that the Shilling would have cemented its stability further had the Central Bank stayed out of dollar-buying, a move that prevented the Shilling from gaining ground in recent weeks.
However, the Central Bank refuted the claims, maintaining that it had no preferred level for the shilling and only stepped in to smooth out volatility in either direction.
The Shilling has been rallying strongly against the Dollar in recent weeks, a position that has been majorly bolstered by inflows from tea exports and foreign remittances.
A hundred Kenyan shilling banknotes and ten shilling coins
Photo
Shutterstock
