The Kenya Association of Bankers (KBA) has attributed the recent gain recorded by the Kenyan Shilling to the successful floatation and pricing of the Ksh212.3 billion ($1.5 Eurobond) maturing in 2031 that Kenya sold last week.
According to the bankers, the development serves as an indicator of investors' confidence in Kenya's economy.
KBA also explained the successful pricing of the Eurobond, at a 10.375 per cent interest rate, which is an all-time high for an African State issuing a bond, is also one of the factors behind the Kenyan Shilling's recent rally.
Additionally, the Eurobond contributed by increasing the foreign exchange reserves within the economy a move which has served to strengthen the Shilling.
Further, KBA stated that another factor that contributed to the growth of the Kenyan shilling against the Dollar was the successful sale of an infrastructure bond.
"The strengthening of the Kenya Shilling against the US Dollar is rightly attributable to growing confidence in Kenya’s macro-economic performance and outlook, including the recent floatation and successful pricing of a US $1.5 Eurobond," stated KBA.
The government has already revealed that the infrastructure bond was oversubscribed, garnering Ksh241 billion ($1.58 Billion) which was about three times more than Treasury mandarins were expecting.
These factors combined are said to have positively impacted the Shilling which is currently trading at Ksh141 down from Ksh160 two weeks ago.
Additionally, reports by Reuters indicate that the Central Bank of Kenya (CBK) intervened to purchase dollars from traders to curb the Shilling's volatility.
The report indicated that Kenyans had rushed to sell Dollars owing to the Shilling's resurgence, with the Central Bank purchasing them to stabilise the economy.
Despite the Shilling showing signs of recovery, economist Churchill Ogutu has warned that Kenyans should not expect the resurgence to be permanent.
“From a short-term perspective, based on the money that is coming in and there is not much import demand, definitely that will prop the Shilling,” the economist told Kenyans.co.ke in an interview on February 14.
