Shilling to remain steady despite demand

June 3, 2013
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Deloitte East Africa CEO Sammy Onyango however says the slight drop in the value of the shilling against the dollar and other currencies will be short term due to inflows from a high number of foreign investors expected in the country in the coming months/FILE
Deloitte East Africa CEO Sammy Onyango however says the slight drop in the value of the shilling against the dollar and other currencies will be short term due to inflows from a high number of foreign investors expected in the country in the coming months/FILE
NAIROBI, Kenya, Jun 3 – The Kenya shilling is expected to remain under tight pressure in the coming few days due to the continued high corporate demand for the dollar.

Deloitte East Africa CEO Sammy Onyango however says the slight drop in the value of the shilling against the dollar and other currencies will be short term due to inflows from a high number of foreign investors expected in the country in the coming months.

Onyango told Capital FM Business that the demand from the corporates has been largely driven by the annual dividend payouts by banks to their shareholders.

“Most of these financial institutions are the biggest cause for the pressure on the shilling. As you know this is the time for AGM’s and giving back to the shareholders and of course you can expect such reactions,” Onyango said.

Last week, the Central Bank of Kenya (CBK) sold unspecified amount of dollars to the market to ensure stability after the shilling fell close to 1.7 percent

Onyango says there is no need to worry as this is what he termed as usual market behaviour adding that the shilling will remain strong in the long term.

“I know the market players and Kenyans at large have been very keen on the behaviour of the foreign exchange. But in any case I don’t thing we can go to the extremes we had in 2012,” he assured.

On Monday, the CBK quoted the dollar at 85.22 a slight drop from 85.12 on Friday last week.

“We expect the Central Bank to be on standby and perhaps intervene further just to make sure things are ok and I believe there are it reserves will cater for this,” he added.

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