Kenyan shilling continues to firm up against the dollar

Kenya shilling coins and notes. The shilling has touched a 33-month high to the dollar since July 8, 2015. FILE PHOTO | REUTERS 

In Summary

• The shilling has touched a 33-month high to the dollar since July 8, 2015
• Data from Central Bank of Kenya showed the shilling on Tuesday was trading at 99.90/100 to the dollar steady from Monday’s close of 99.80/100.
• Exporters feel the pinch as their dollar earnings translate into fewer shillings on conversion.

By MARYANNE GICOBI
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The Kenyan shilling on Tuesday continued to firm up against the dollar due to inflows from foreign construction companies selling dollars matching demand from merchant importers.

Data from Central Bank of Kenya showed the shilling on Tuesday was trading at 99.90/100 to the dollar steady from Monday’s close of 99.80/100.

On Friday, the shilling touched a 33-month high to the dollar on as investor portfolio inflows coupled with exporter inflows offset corporate demand for the greenback.

It reached 99.95 to the dollar in early trading, the first time it has risen to that level since July 8, 2015.

A strong shilling is an advantage for the importers as it eases exchange rate costs. The ripple effect is lower costs of goods for the consumers.

Exporters feel the pinch as their dollar earnings translate into fewer shillings on conversion.

The shilling was stable throughout last year against the dollar, largely helped by record inflows from Kenyans abroad and interventions by the Central Bank of Kenya (CBK) amid fears on impact of elections on the economy.

The shilling kicked off with a turbulent note at the start of 2017, slipping to a 15-month low against the dollar within the first week, but it later stabilised as political temperatures around the presidential election fell.