Photos/FILE Dealers quoted the shilling at Sh91.45 with expectations that it could slide down further against the dollar in the coming days.
By JOSEPH BONYO jbonyo@ke.nationmedia.com
Posted Tuesday, June 21 2011 at 22:30
Posted Tuesday, June 21 2011 at 22:30
The shilling traded at new lows on Tuesday exchanging at Sh92 to the dollar, the first in its history.
The plunge on increased demand of the greenback in the market is a trend that has been building since the beginning of the year.
The fall has been estimated at 12 per cent against the dollar in the last six months.
Globally, it has been ranked among the worst performing currencies alongside those of Middle East and Asian units like the Suriname’s dollar, Maldives’ rufiyaa and the Iranian rial.
Dealers quoted the shilling at Sh91.45 with expectations that it could slide down further in the coming days.
It opened the day’s trade at Sh91.05 but continued to slip as the day drew to a close. Despite the fall, Central Bank of Kenya kept faith in its non-intervention policy on the market.
The bank was only in the market to mop up Sh500 million in repos as part of its tightening policy. The regulator says the weakening of the shilling is short-term and would soon correct itself.
The market, however, maintains that an intervention by CBK would help the local unit recoup some lost ground.
Attract no duty
The new lows were recorded on the back of a ministerial announcement on duty waiver for maize imports to the country.
Finance Minister Uhuru Kenyatta said that any maize brought into the country between June 10 and December 31, 2011 will attract no duty.
His decision was part of a short-term strategy by the government to boost food stocks ahead of looming hunger.
Being a net importer, the country’s current account deficits have also been increasing on high fuel prices, piling more pressure to the shilling.
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