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Shilling appreciation tempo wanes off

Shilling appreciation tempo wanes off

The shilling appreciation seemed to have been short lived after losing 67 per cent of what it gained in the first week of this month.

The shilling, according to Orbit Securities weekly Synopsis, depreciated by 225 pips on a weekly basis to close last week at a weighted average exchange rate of 2,308/95 against the US dollars.

“The appreciation of the shilling seems to have been short lived as the shilling lost substantially of what was gained during the last two weeks,” Orbit said. The stock-brokerage firm said the total amount traded on the Interbank Foreign Exchange Market (IFEM) also fell by 42.5 per cent to 13.45million US dollars, relaxing the growth seen in the last three weeks.

“The IFEM also saw fewer trading sessions compared to the previous week, part of the reason of a lesser turnover,” Orbit report said.

The local currency went into appreciation mode against the greenback since the third week of last month, around the same time when International Monetary Fund (IMF) approved the 1.3tri/-Covid-19 relief fund to the country.

The shilling appreciated by almost 5/- at the start of this week and traded at a weighted average exchange rate of 2,306/- a greenback—being the highest gain recorded in three weeks in recent years. However, the shilling started the week trading flat against the greenback, thanks to inflows commodities and NGOs.

“[The] shilling continued trading flat against the dollar with inflows from commodities and NGOs cushioning the appetite for the dollar from SMEs, oil marketing companies (OMCs) and manufacturers that was seen,” NMB daily market report of Monday said.

The lender quoted the shilling traded at 2287/2327 levels and same trend is expected throughout the week. Vertex International Securities Advisory and Capital Market, Manager, Ahmed Nganya told ‘Daily News’ last week that IMF facility would have slight impact on shilling value.

“We do not think the facility will have a strong effect on our currency because a huge portion of the fund going out through imports of water and medical equipment,” Mr Nganya said.

Globally, US dollar gained broadly on Monday, rebounding towards a one-year high hit last week as slowing economic growth in China and firmer US Treasury yields boosted the appeal of the greenback with the Japanese yen among the major losers.

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GEITA Gold Mining (GGM) has contributed over ...

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Mwandishi: DAILYNEWS REPORTER

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