THE shilling remained stable last week as activities slowed down slightly amid improving inflows of hard currencies, thanks to agriculture sector. “As the shilling liquidity position continues improving, the demand for US dollars in the market was offset by supply from agriculture sector,” Standard Chartered Bank said in its daily market report on Friday, expressing optimism over stable trading of the shilling.
CRDB said the shilling remained stable against the greenback last week despite the dollar demand from oil and energy sector because of the inflows from the exports of agricultural produce.
At close of local interbank foreign exchange market, commercial banks quoted the local unit at 1617/1627 against the dollar, which was the same as Wednesday’s.
The National Microfinance Bank (NMB) said that the shilling weakened against the dollar on Thursday’s trading session, as strong demand from the oil sector outweighed the recent increase in agricultural inflows.
“Volatility is likely as these forces affect the market in different volumes during the sessions ahead,” NMB said. The shilling depreciated on Friday to the lowest level in 20 months, with analysts projecting the recurrence of the historical low level reached about two years ago.
The shilling, according to data from the central bank, closed at 1,619/68 per US dollar last Friday, the rate similar to that of late December 2011. It opened the year at 1579/98. Records by the central bank shows that the lowest level the shilling has ever gone was 1,797/40 in October 2011.