Kenya shilling soars against dollar to trade at Sh139

 

Kenya’s shilling has continued to soar against the dollar trading at Sh139 on Tuesday, showing one of its strongest recovers in months.

The official Central Bank figures quoted the shilling trading at Sh139.4919 again greenback on Tuesday morning, up from Sh140.4357 on Monday.

At one point on February 15, the shilling was up almost 8 per cent, bidding as strong as 139.00 to the U.S. dollar, CBK data showed then.

The shilling rally then was attributed to foreign inflows into Kenyan domestic debt and the resolution of a $2 billion Eurobond maturing in June.

The continuous rally of the Kenya shilling has signalled a significant tide turn for the currency which was expected to shed more value this year after the shilling hit an all-time high of over 160 against the US dollar.

The trajectory now seems to change with the inflow of dollar-denominated support from the International Monetary Fund (IMF) which disbursed USD 684 million on January 18.

This was followed by another disbursement from the Trade Development Bank on January 24 to the tune of USD 385 million.

Last month, National Treasury Principal Secretary Chris Kiptoo said that Kenyans hoarding the dollar should take advantage of the current window to sell off their dollar or risk losing them even as he remains bullish that the shilling will continue to rally against the dollar.

“I want to encourage Kenyans, if you’re holding any dollar because you fear the Eurobond, please note that now the risk of failure to settle the Eurobond is gone and so you need to get back to business sell your dollars and get back to business don’t do any speculation anymore,” he added.

In January Central Bank of Kenya Governor Kamau Thugge had indicated that the CBK would intervene to minimize the volatility that had seen the shilling hit an all-time low against the dollar and other major currencies.

“It is my view that the exchange rate has overshot the equilibrium rate so there could be scope for the Central Bank to support the exchange rate going forward,” said the CBK boss.

by JAMES MBAKA