Kenya shilling sustains gains ahead of Easter

The Kenya shilling gained more ground against the U.S. dollar on Wednesday, clocking 103.2 following continued rise of inflows ahead of the Easter holiday.

The shilling had on Tuesday climbed up 0.05 percent to 103.3 boosted by increased dollar inflows amid low demand from oil importers. The currency had also on Monday gone up by the same margin.

The Central Bank of Kenya (CBK) on Wednesday quoted the shilling at an average of 103.4 but commercial banks put the local unit against the dollar at a high of 103.2 and a low of 103.3.

The shilling has been under pressure in the last weeks declining to 103.5 against the dollar following increased dollar demand from oil and retail importers.

On a year-to-date basis, the shilling has depreciated against the dollar by 0.9 percent, while it has depreciated by 0.4 percent since the U.S. Fed rate hike in mid-March.

Two things are expected to affect the shilling moving forward. First is the global strengthening of the dollar due to planned rate hikes in the course of the year, and second, the recovery of global oil prices.

However, Kenya currently has 8 billion dollars in foreign exchange reserves which the CBK can use to buttress the currency in case of strains. Endit