The shilling has continued to appreciate as it gained by 2/- at the close of the week, a trend attributed to tight liquidity measures.
Commercial banks closed at 1,585/1,591 levels two shillings high from Thursday close.
National Microfinance Bank (NMB) said shilling “edged slightly high against the dollar on Friday after it weakened in the morning trading session on the back of corporate demand to as low as 1,585/1,595”.
Despite the appreciation, economist said the shilling was still low and suggesting that at least it should reach a 1,200/- a dollar level to facilitate imports.
“We are net importers, if shilling trade low it means imports become expensive to fuel inflation,” an economist said over the weekend.
Standard Chartered Bank said the shilling continued its trend of flat trading against the US dollar as demand was well matched by supply.
“Today we expect a similar trend with low level of volatility,” the StanChart said last Friday.
Meanwhile, in the cash Money Markets, liquidity stance slightly eased helped by maturities from government securities and banks adding funds to their positions through customer’s deposits.
However, interbank overnight rates remained high with a marginal increase from the previous average close rate at 27.28 per cent to 27.69 per cent.
The lowest offer stood at 25 per cent while the highest rate offered was at 30 per cent. The total traded volume decreased to 41.65bn/- from the previous volume at 76.05bn/-.
Source: The Daily News, reported by Abduel Elinaza
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