Kenya’s currency Wednesday exchanged at 111.7735 against the dollar, owing to the high demand for import payments.
COMMERCIAL BANKS’ AVERAGE EXCHANGE RATES FOR
MAJOR CURRENCIES/KES (CLOSING OF MARKET) ON
|KES / USHS||31.5818||31.5088||31.6548|
|KES / TSHS||20.5863||20.5232||20.6495|
|KES / RWF||9.1201||9.1064||9.1338|
|KES / BIF||17.8064||17.7035||17.9093|
During the week ending 5 Nov, the Kenyan shilling depreciated by 0.3% against the US dollar to close the week at Kshs 111.5, from Kshs 111.2 recorded the previous week.
In October, the shilling ended the month 0.8% weaker against the US dollar, this was linked to obstinate dollar demand as dollar liquidity thinned.
Market Analysts are of the view that the shilling could remain on the back foot, potentially breaking above the 112 level in November.
“Current account pressure will persist as import levels rise. Export earnings will recover further but may not match the growth in demand. Healthy FX reserve position will continue to provide cushion but deployment may be limit by the persistent uncertainty,” Stephanie Kimani, Analysts from NCBA said.
The shilling is however expected to be supported by: the Forex reserves, currently at USD 9.1 bn (equivalent to 5.5-months of import cover), which is above the statutory requirement of maintaining at least 4.0-months of import cover, and the EAC region’s convergence criteria of 4.5-months of import cover.
In addition to improving diaspora remittances which have increased 18.8% y/y increase to USD 309.8 million in September 2021, from USD 260.7 million recorded over the same period in 2020, which has continued to cushion the shilling against further depreciation.