Experts in the country's financial system have projected moderate pressure on the exchange rate within the next three months.
As detailed in the Market Perceptions Survey that was conducted by the Central Bank of Kenya (CBK), the experts revealed that the pressure would be experienced owing to the anticipated demand for the dollar.
The experts from Commercial banks, micro-finance banks, and non-bank private sector firms explained that the demand for the dollar would be occasioned by the repayment of the Eurobond which is dominated by dollars.
On the other hand, the experts noted that there would be minimal foreign investments during that period, hence more pressure on the dollar.
"Respondents expected some moderate pressure from demand emanating from expected USD Eurobond repayment and low portfolio inflows," read the report in part.
Nonetheless, they expressed that the exchange rate would generally remain stable during the review period.
The experts credited their project to the funding the country was going to be receiving from international money leaders such as the World Bank and the International Monetary Fund (IMF).
Notably, on Tuesday, the IMF reached an agreement with Kenya over a Ksh126 billion ($976 million) funding.
"Results showed that respondents expected the Shilling to remain stable or strengthen in the next two months supported by improved confidence following infrastructure bond and Eurobond issuance, strong diaspora remittances, improved liquidity arising from IMF and World Bank support, and attractive yields on local assets due to higher interest rates," read the report in part.
In recent months the shilling has been gaining against the greenback. For instance, the Shilling gained by over 24 points against the dollar between January and March.
This was mostly attributed to Kenya's involvement in the Eurobond market early in the year. This was reported to have improved investor's confidence who started to put their money into the economy.
Notably, the Shilling was named as the best-performing currency in Sub-Saharan Africa by the World Bank. Currently, the dollar is trading at Ksh128.
"The Kenyan shilling is the best-performing currency in the subcontinent as it recorded an appreciation of 16 per cent so far this year," read the report by the World Bank.
