In the year to date, the shilling remains in positive territory against the dollar. FILE PHOTO | NMG
The shilling held firm to the gains made against the dollar last
week in Monday’s trading as support continued to come in from portfolio
investors into the market.
Commercial banks quoted the currency at an average of 100.85/101.05 in the afternoon, having opened the day at a similar level.
There
was fairly muted demand for the dollar last week, which saw the
shilling gain 0.4 per cent against the greenback to close the week at a
five-week high of 100.95 on average.
“In the new week,
we see the shilling holding within the current ranges, although with a
slight bearish bias should demand for the greenback recover,” said
Commercial Bank of Africa in a market note on Monday.
The
end-of-the-month period usually sees heightened dollar demand form
importers looking to settle overseas obligations to their suppliers,
meaning that this week the shilling may struggle to hold below the 100
level to the dollar.
In the year to date, the shilling remains in positive territory against the dollar, having strengthened by 2.3 per cent.
The
market is also alive to the increase in the foreign reserves held at
the Central Bank of Kenya, which gives the regulator greater muscle to
smoothen any volatility in the exchange rate.
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