Shilling rides on low demand for dollar to go below 102 units

The shilling made a strong showing versus dollar on February 1. FILE PHOTO | NMG 

In Summary

• Reuters’ data on Thursday indicated commercial banks on average were quoting the shilling at 101.85/102.05 units by 2.30 pm.
• During the opening of the markets in the morning, the Central Bank of Kenya indicated the mean exchange rate was Sh101.9917 with buying at Sh101.8917 and selling at Sh102.0917.

By GEOFFREY IRUNGU
More by this Author

The shilling fell below 102 units to the dollar for the first time since December 9, 2016 on the strength of weak demand for the greenback.

Reuters’ data on Thursday indicated commercial banks on average were quoting the shilling at 101.85/102.05 units by 2.30 pm.

During the opening of the markets in the morning, the Central Bank of Kenya indicated the mean exchange rate was Sh101.9917 with buying at Sh101.8917 and selling at Sh102.0917.

A dealer at ABC Bank said the shilling was a beneficiary of the limited dollar demand as well as a stable political environment.

“We have seen the shilling show strength recently, because there is not so much demand especially today. The political environment has also improved and therefore the shilling has benefited,” the dealer said referring the General Election concluded last year.

READ: Shilling now hits new high against the greenback

The local unit was on its way up from Wednesday, when Commercial Bank of Africa reported that there was an improved sentiment for the local currency, even as the dollar was gaining against its peers internationally.

“The shilling was the star currency as it made strong headway against the US dollar on Wednesday. A drove of foreign currency sellers swung into action and hauled the USD/KES pair lower. Sentiment for the local unit has improved recently from both local and foreign investors...,” said CBA in a note.