The Kenya Shilling was quoted at 109.6559 against the US Dollar by the Central Bank of Kenya (CBK) when the forex markets opened today.
This is compared to Thursday, February 4th, 2021, when the local unit exchanged at KSh 109.86 per US dollar and KSh 110.15 per US dollar on January 28th, 2021. Thus, the Kenyan Shilling gained 0.3% against the US dollar during the past week.
The Shilling’s strength is attributed to increased forex inflows from exports in the agricultural sector, including tea, coffee, and horticultural exports. But traders expect dollar inflows to decline due to poor performance of other sectors such as tourism.
There is also the uncertainty posed by the COVID-19 pandemic, which is pushing more people to hold larger amounts of dollars and other hard currencies.
The local unit has also benefited from improved diaspora remittances, which recorded a 19.7% increase to US$ 299.6 Million in December 2020, from US$ 250.3 Million recorded over the same period in 2019.
These inflows have continued to shield the Shilling against further weakening against the US$.
According to the Central Bank of Kenya Weekly Bulletin, Kenya’s forex was at US$ 7,617 Million or 4.68 months of import cover, as of February 4th 2021. This is compared to US$ 7,663 Million on January 28th, 2021 and US$ 7,807 on January 14th, 2021.
The CBK key rates on Kenya Shilling against the US dollar, while much lower than rates offered at the forex bureaus and commercial banks, are merely indicative.
Individual forex bureaus and commercial banks set their rates, which are held to reasonable levels of variance and margins due to competition in the market.
Consumers seeking to exchange smaller units usually find more favourable rates at forex bureaus. Those keen on dealing with larger amounts through foreign accounts will find better rates at commercial banks.
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