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Shilling seen firmer on remittances, shares fall

16 December 2014, 08:36

Nairobi - Shilling eased on Monday but was seen firming on dollar inflows before the holiday season sent by Kenyans abroad, while Safaricom dragged stocks lower.

At close of trade at 1300 GMT, commercial banks quoted the shilling slightly weaker at 90.60/70 to the dollar compared with Thursday's close of 90.55/65. Kenyan markets were closed on Friday for a national holiday.

Dollar demand from importers led to the shilling's fall, Julius Kiriinya, a trader at African Banking Corporation.

"There was a bit of demand, but I think we should see some support for the shilling when people start closing (for the holidays," he said.

Duncan Kinuthia, head of trading at Commercial Bank of Africa, said the shilling will also get support from remittances or money sent by Kenyans living abroad, which is one of the country's main sources of foreign exchange.

Remittances to Kenya rose 11 percent to $1.06 billion in the first nine months of this year compared with the same period a year ago, central bank data showed.

Read Also: ERC cuts maximum retail prices of fuel

Another trader at a Nairobi-based commercial Bank said the security situation in Kenya could still undermine the shilling.

A fall in tourist numbers following a spate of Islamist attacks - another key source of hard currency inflows for east Africa's biggest economy - has put pressure on the shilling.

On the Nairobi Securities Exchange, the main NSE-20 Share Index was down 0.4 percent or 18.14 points to close at 5,106.67 points.

Safaricom's shares fell 0.71 percent to close at 13.95 shillings on profit-taking, analysts said, after a rally sent the price to a lifetime high of 15.15 shillings a share on December 8 giving it the market's biggest capitalisation.

Government bonds valued at 241.25 million shillings ($2.67 million) were traded on the secondary market, down from 2.82 billion shillings on Thursday.

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- Reuters


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