Shilling posts best performance against dollar in a year

The shilling on Thursday strengthened to its highest level in more than a year.

The Central Bank of Kenya (CBK) quoted the local currency at Sh101.99 against the dollar, better than Wednesday’s close of Sh102.35.

This is the strongest level that the shilling has risen in more than a year and last traded under Sh102 levels in December 2016.

On December 6, 2016, the shilling traded at Sh101.87 against the US dollar.

Healthy inflows

According to a Reuters report, commercial banks quoted the shilling at between Sh101.80 and Sh102 per dollar during Thursday’s early morning trade.

The shilling strengthened in January due to what CBK said were earnings by exporters.

The local currency has also been boosted by inflows from investors looking to take advantage of a Sh40 billion infrastructure bond whose sale closed in the last week of the month.

This week, traders attributed the strengthening of the shilling to healthy dollar inflows and banks cutting their long dollar positions.

Dollar positions

There was also relief in the market following the largely peaceful swearing-in of Opposition leader Raila Odinga as the 'people’s president' on Tuesday.

The shilling held steady for the better part of last year despite the prolonged campaign and election period, strengthening from a low of Sh104 that it had traded against the dollar at the beginning of 2017 to hold steady at Sh103.