Kenya Shilling to weaken against the US dollar; Experts warn
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Foreign exchange experts warn of weakening of the Kenya Shilling against the US dollar in the coming days
Foreign exchange experts warn of weakening of the Kenya Shilling against the US dollar in the coming days.
In their report, the analysts noted the local currency was projected to weaken due to high demand for the dollar by the fuel retailing companies.
According to the experts, there was pressure on foreign exchange caused by fuel companies who demanded more Dollars to purchase petroleum from oil-producing countries.
“Kenya’s shilling was stable on Thursday, but it could weaken in coming days due to demand from fuel retailing companies,” noted the analysts.
As at Thursday, May 16, commercial banks quoted the shilling at 130.00/131.00 per dollar, the same as Wednesday’s closing rate.
It is worth noting that the dollars are crucial for traders seeking to facilitate trade on the international markets, a major factor that contributed to the high demand for the US currency.
The Kenya shilling was also projected to weaken due to the recent gains by the Dollar witnessed in recent weeks that have caused several currencies to drop in value.
The local currency made consecutive gains in recent weeks which saw it strengthen against major currencies in the world.
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A recent report by the World Bank ranked the Kenyan shilling as the best-performing currency in the Sub-Saharan region.
The shilling’s gain was majorly attributed to the increased coffee and tea exports by Kenya to other countries and increased diaspora remittances.
Recently, the Non-governmental organization was also lauded for its role in the strengthening of the local currency through its dollar inflows to Kenya.
Another significant factor that led to the shilling’s stability was the oversubscription of the infrastructure bonds and the repayment of the Ksh310 billion ($2 billion) Eurobond.
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