Kenya Shilling Set to Tumble Against Dollar, Experts Warn
Foreign exchange experts have alerted Kenyans that the shilling is expected to weaken against the United States Dollar in the coming days.
The analysts explained in their report that the local currency is forecasted to weaken due to high demand for the dollar by fuel retailing companies.
Experts highlighted that fuel companies’ increased demand for dollars to purchase petroleum from oil-producing nations is exerting pressure on foreign exchange.
“Kenya’s shilling was stable on Thursday, but it could weaken in the coming days due to demand from fuel retailing companies,” the analysts stated.
As of Thursday, May 16, commercial banks quoted the shilling at 130.00/131.00 per dollar, maintaining the same rate as Wednesday’s close.
It’s important to note that dollars are essential for traders engaging in international markets, significantly contributing to the high demand for the US currency.
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The shilling is also expected to weaken due to recent gains by the Dollar, which have led to a decline in the value of several currencies.
The local currency experienced consecutive gains in recent weeks, strengthening against major world currencies.
A recent World Bank report ranked the Kenyan shilling as the best-performing currency in the Sub-Saharan region.
The shilling’s gain was mainly due to increased exports of coffee and tea from Kenya to other countries and higher remittances from the diaspora.
Recently, a non-governmental organization was praised for its role in strengthening the local currency through its dollar inflows to Kenya.
Another key factor contributing to the shilling’s stability was the oversubscription of infrastructure bonds and the repayment of the Ksh310 billion ($2 billion) Eurobond.
Kenya Shilling Set to Tumble Against Dollar, Experts Warn