The Kenya Shilling appreciated against the US dollar to exchange at KSh 105.91 during the week ended April 17. This is compared to KSh 106.04 the previous week.
The local unit, however, weakened against the Sterling pound to exchange at KSh 132.23 against KSh 130.80 during the past week ending 9th April, 2020.
It also lost ground slightly against the Euro to exchange at KSh 115.52 compared to KSh 115.11 the previous period.
Traders expect the local unit to come under pressure in the coming weeks as coronavirus-related slowdown, takes its toll on key economic sectors.
With shutdowns in place in key exports markets, the Kenya Shilling could weaken as foreign currency inflows from diaspora remittances dry up and flows from offshore investors dwindle. A rise in coronavirus cases has affected business with offshore inflows are not coming to meet rising dollar demand.
Weekly data from the Central Bank of Kenya(CBK) shows that the Treasury bills auction of April 16 received bids totalling KSh 14.3 billion against an advertised amount of KSh 24.0 billion, representing a performance of 59.5 per cent.
Interest rates on the 91-day and 182-day Treasury bills decreased, while that on the 364-day Treasury bill increased marginally.
The money market was liquid during the week ending April 16, supported by government payments, which partly offset receipts from tax and auction of government securities.
The average interbank rate was 5.93 per cent on April 16 compared to 5.32 per cent on April 9. The average number of interbank deals per day increased to 18 from 14 in the previous week, while the value traded decreased to KSh 5.6 billion from KSh 8.2 billion in the previous week.
The IMF’s World Economic Outlook released on April 14, projects global growth to decline to negative 3 per cent in 2020, a downgrade of 6.3 percentage points from the January projection.
The downward revision cuts across all countries and regions, with Sub-Saharan Africa’s growth, projected to decline to negative 1.6 per cent in 2020.
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