Shilling boosted by dollar inflows to buy government debt
24 October 2015, 08:47
Nairobi - The Kenya shilling strengthened further on a steady inflow of dollars to be used for buying the country’s high-yielding government debt. At 10.05am Thursday, commercial banks posted the shilling at 101.80/102.00 to the dollar, tightening up from Wednesday’s close of 102.00/10.
“We have seen huge interest in the government securities from offshore investors,” said a trader at one Nairobi-based commercial bank.
In recent weeks traders have reported growing dollar inflows from foreign investors who have been attracted by interest rates on government Treasury bills of more than 20 per cent, far above what Kenya usually pays for short-term debt.
At the Weekly Treasury bill auction on Wednesday, the yield on the 364-day bill jumped to 22.36 per cent from 21.88 per cent a week ago, while that on the six-month bill jumped to 22.29 per cent from 21.84 per cent.
The currency, down about 14 per cent against the dollar in 2015, has weakened consistently over the last year due to a decline in tourism, a major foreign currency earner, and a high current account deficit.
For the latest on national news, politics, sport, entertainment and more follow us on Twitter and like our Facebook page!