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NAIROBI, May 2 (Xinhua) -- The Kenyan shilling firmed againstthe U.S. dollar on Tuesday to close the day at 103 buoyed by lowdollar demand from importers.
The shilling had closed on Friday last week at a high of 103.1boosted by Diaspora inflows and analysts had expected the rally topersist.
Tuesday, commercial banks quoted the local unit at 103.0002 asdealers noted there was weak dollar demand from importers amidtight liquidity in the money market.
On the other hand, the Central Bank of Kenya (CBK) put theshilling against the dollar at 103.1 up from 103.2 last Friday.
There has been an increase in dollar inflows into Kenya in thelast one week especially from government securities and externalloans Gary Sanchez Jersey , pushing up foreign exchange reserves to enable CBK supportthe shilling.
Kenya's forex reserves stand at an all-time high of 8.3 billiondollars or an equivalent of 5.5 months of import cover from 8billion dollars or equivalent to 5.3 months, according to the apexbank.
"We expect the shilling to come under pressure but with thecurrent forex reserve level, we believe the CBK will be able tosupport any depreciation in the short term," Cytonn Neil Walker Jersey , aNairobi-based investment firm, noted Tuesday.
However, going forward, Cytonn expects the shilling to weakendue to global strengthening of the dollar leading to an increase inthe cost of imports.
And given that Kenya is going through an electioneering period Mariano Rivera Jersey ,Cytonn noted that there would be an increase in money supply due tocampaign funds. Enditem
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