Kenyan shilling hits year-high amid surging inflows

The Kenyan shilling on Wednesday advanced against the U.S. dollar to clock a level last seen some 12 months ago.

It traded at an average of 102.50 per the dollar, a year-high from 102.75 in the previous session on Tuesday when it recorded a 10-month high after the Central Bank of Kenya decided on Monday to retain the Central Bank Rate at 10.0%.

On Wednesday, the apex bank quoted the local currency at 102.55 during the session up from 102.79 in the Tuesday trading.

On the other hand, commercial banks placed the local currency at between 102.30 and 102.40, a rise from 102.40 and 102.60.

Forex traders attributed the surge of the shilling to high inflows at the debt market as foreign investors buy infrastructure bond worth Ksh 39.7 billion (US$388 million) floated over a week ago by the government.

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However, as it sustained an upward trend against the dollar, the shilling has taken downward path against the British pound, going down to 143.62 on Wednesday from 142.84 in the previous session.

Analysts forecast that the shilling would rise in the coming days to reach 102.30 level due to high inflows and low demand for dollars.