Last week, the shilling weakened marginally against the US Dollar closing the week at 129.5 from 128.6 the previous week.
- The shilling’s 0.8% retreat shrunk the year-to-date performance to 17.2% from 17.8% the week before.
- Kenya’s usable forex reserves dropped slightly to US$ 7,800 million, enough to cover 4.1 months of import cover from US$ 8,321 million the previous week.
- The decrease comes a week after settlement of the $560 million of the 2014 Eurobond using the $1.2 billion World Bank loan to Kenya.
“The successful partial refinancing of the Kenya 2024 Eurobond delivered a decisive boost of confidence to investors, whereas the complementary set of liberal reforms to the foreign exchange interbank market helped the Kenya shilling achieve greater price discovery,” Ronny Chokaa, Senior research analyst at AIB-AXYS AFRICA told The Kenyan Wall Street recently.
Liquidity conditions in the interbank market tightened with the average interbank rate jolting higher to 13.30% from 13.10% recorded a week prior. The interbank rate trailed within the adjusted CBK range with market operations remaining active.
In the international markets, yields on Kenya’s Eurobond increased by 24 basis points reflecting jittery investor sentiments amid the anti-finance bill protests during the week.
The equities market closed the week on a bearish note, signaled by the Nairobi All Share Index (NASI), which fell marginally by 2.9% to close the week at 109.49. However, the year-to-date performance was up 18.9%, signaling recovery.
