Shilling loses firmness over dollar as pressure mount

As the local currency slightly lost it ground, CRDB Bank said pressure on the shilling from dollar was still being maintained. “The pair left the stable levels of the previous week to continue to weaken against the dollar by the end of the session,” CRDB said in a daily market report yesterday.

The bank, however, said the shilling has seen pressure subdue slightly by the end of the week. “…Demand for the greenback has been sustained by the market but insufficient supply to satisfy it,” the bank said. Overall, the shilling since the year began, some seven weeks ago, has depreciated slightly by 0.5 per cent to 2,254/- yesterday from 2,242/- in January.

On the other hand, NMB Bank said the pressure on shilling expected to mount further in this quarter as importers expected to come heavy to the market that has limited supply. “Importers are expected to come heavy to the market in Q1, 2018 with limited inflows could potentially push up the pair,” NMB said in latest Market Digest.

However, NMB said, central bank’s sporadic intervention in the market “will keep the pair buoyed”. The bank projection based on the previous quarter, Q4 2017, where the volumes traded in the Interbank Foreign Exchange Market significantly increased to 710million US dollars from 439 million US dollars of Q3 2017.

“This was on the back of increased activities between banks and central bank catalysed by cashew flows,” NMB Digest showed.

Source: DAILY NEWS

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