Kenya Shilling to Weaken Against US Dollar In Coming Days, Experts Warn

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Foreign exchange experts have warned Kenyans that the shilling is set to weaken in the coming days against the United States Dollar.

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.

Photo of synthetic oil being put on a car engine

Photo: Lesueur Car Company

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 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.

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 organisation 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.

Former CBK Governor Patrick Njoroge holding bank notes (left) and someone counting 100 US dollar bills.

Photo

CBK / Trade Africa



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