Money & Careers
The Kenyan shilling weakened on Thursday due to some merchandise importers and retailers buying dollars to meet their obligations
The Kenyan shilling weakened on Thursday due to some merchandise importers and retailers buying dollars to meet their obligations amid lacklustre inflows due to the coronavirus-related disruptions, traders said.
Commercial banks quoted the shilling at 105.75/95 per dollar, compared with 105.45/75 at Wednesday's close.
"The direction is for a weaker shilling... the flows are not good compared to the normal market where we could see tea and coffee inflows," said a senior trader from one commercial bank.
Tourism and horticulture, key foreign exchange earners, are already reeling from the disruptions caused by the coronavirus.
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Towards end of March Governor Patrick Njoroge of Kenya’s central bank said some of the shilling’s recent weakening was caused by market misunderstanding of the regulator’s plan to boost its reserve by buying dollars from the market.
The bank in March said it will buy 100 million US dollar a month between March and June to increase reserves and will also purchase a minimum $1 million from banks at prevailing rates in each deal.
The bank has bought dollars in the past through open market operations, but it does not usually disclose the target amount or any other details.