High importer demand sinks shilling to 15 month low
The Kenya shilling continues to weaken against major global currencies, slipping to a 15 month low against the U.S Dollar in mid morning trade.
According to currency traders, the shilling is trading at Sh103.60 buying and Sh103.80 selling against the dollar.
The weakening has been brought about by increased demand for dollars from importers after the festive season.
The shilling closed Wednesday’s trading session at Sh103.10 and Sh103.20.
Traders say the Central Bank of Kenya (CBK) has been active in the market selling dollars in an effort of supporting the shillings.
In data released in December, the CBK’s foreign exchange reserve had dipped to $6.97 billion, which is enough to cover four and half months of imports.
Kenya is a net importer of goods, with a weak shilling likely to see commodity prices rising.
The Central Bank’s Monetary Policy Committee (MPC) will hold the first meeting of the year on the 30th of January with eyes on how the banking regulator moves to take currency volatility.
The shilling, which was broadly stable against the dollar for most of last year, has been under pressure this year.
Traders attributed the pressure to higher prices of oil in global markets.
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