The Kenyan shilling remained unchanged this week from Monday, August 26 to Friday, August 30 as it traded at Ksh129.25 against the United States dollar.
Analysts at Reuters said the local currency remained flat throughout the week due to balanced dollar demand and supply and the central bank's intervention.
According to experts, the dollar demand by the manufacturing sector matched the foreign currency inflow from foreign investors who sought to purchase the government's infrastructure bonds.
The local currency’s unchanged status was also attributed to the Central Bank’s decision to purchase dollars to prevent the local currency's volatility.
As of Friday, August 30, commercial banks quoted the shilling at Ksh129.25 against the dollar, the same levels it closed on Thursday.
“It’s very stable. Demand and supply seem to be evenly matched. There’s been some good (FX) demand but offshore flows are coming for the infrastructure bond,” one trader noted.
“We’re not seeing any interest on either side. No major tickets on bids or offers,” another traded commented.
However, on Wednesday the local currency strengthened slightly to 129.50 compared to Tuesday’s trading levels of 129.25.
This was due to dollar inflows from the agricultural sector and the Central Bank’s decision to buy dollars to prevent volatility.
The shilling has been relatively steady for several months since February, easing jitters that East Africa's most stable economy would default on its Ksh310 billion ($2 billion) Eurobond that matured in June.
The shilling's latest status comes days after analysts revealed the local currency would stabilise throughout the week on increased investor confidence.
Kenya's currency was also projected to gain due to reduced foreign currency demand by fuel importers and manufacturers.
According to experts, the Shilling would stabilise slightly against the dollar after manufacturers and fuel importers resorted to reducing their dollar purchases.
Nonetheless, the shilling remains the best-performing currency globally after gaining by about 17 per cent against the dollar.
This is despite weakening in early July following the downgrade by Moody's credit rating agency that reduced the country's credit ratings to "Caa1" from "B3".
Moody's downgrade was attributed to the country's inability to pay its external debts due to Kenya's poor fiscal policies coupled with the recent anti-government protests.
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