Shilling hits 3-month high against dollar on easing poll tensions

The shilling has hit a three-month high against the dollar, gaining ground on easing of political heat in the country following the decision by the Nasa coalition to fight their election protest through the courts.

Traders said importers have reduced their demand for dollars on the back of a return to normalcy in the economy, which coupled with some support by the Central Bank of Kenya (CBK), has stabilised the shilling.

READ: Kenya shilling slightly firmer, eye on political developments

The CBK’s mean indicative rate for the shilling stood at 103.23 units to the dollar on Monday, up from 103.37 on Friday. It is the highest the shilling has gone against the dollar since May 16.

“The dollar has been softening, on account of reduced political pressures in the market which had been affecting importers. The regulator has also remained active in the market offering support to the local unit, as indicated by the $26 million decline in the foreign reserves to $7.42 billion (4.93 months of import cover),” said Kingdom Securities in a market brief.

“The reserves have been on a downtrend since late April, demonstrating the interventions the regulator has made towards propping the local unit.”