Kenya shilling holds firm despite high U.S. dollar demand

Source: Xinhua| 2017-06-15 00:17:38|Editor: huaxia
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NAIROBI, June 14 (Xinhua) -- The Kenya shilling held firm against the U.S. dollar Wednesday despite pressure from increased dollar demand from retail importers.

The shilling closed the day at 103.36, a slight decline from Tuesday's 103.34. The Central Bank of Kenya, however, quoted the shilling at a lower of 103.37, a slight decline from Tuesday's level.

Commercial banks, however, placed the value of the local unit at between 103.25 and 103.45 from 103.40 and 103.50 the previous day, with traders citing increased dollar demand from retail importers, including those in the energy sector.

On the other hand, Wednesday, the shilling weakened against the British Pound to stand at 131.78 from the previous day's 130.90.

Kenya's forex reserve level currently stands at 8.2 billion dollars or an equivalent to 5.3 months of import cover, down from 8.3 billion dollars from 5.5 months of cover.

The CBK can use the reserves to prop up the shilling in case of adverse movement. The country also has an International Monetary Fund precautionary credit facility of 1.5 billion or equivalent to a month of import cover, which it can draw in case of forex challenges.

The East African nation is currently recording a rise in diaspora remittances and inflows from horticultural exports, offsetting the demand from oil importers. Enditem