NAIROBI: Kenya’s shilling was firm in early trading on Wednesday with foreign investor dollar inflows into the stock market providing some support after months of steady weakening.
Traders said the naming of IMF adviser Patrick Ngugi Njoroge as the new central bank governor was encouraging, in part because it removed lingering uncertainty after the previous governor’s term ended in March. “Just naming a governor is a positive thing,” said one senior trader who asked not to be named.
By 0644 GMT, the shilling was quoted at 96.70/90, almost unchanged from Tuesday’s close of 96.80/90. The shilling has slipped from the 90-level since the start of the year, falling to around 98 to the dollar last week.
“We are seeing foreign investors coming back to the stock market. That has boosted the shilling,” said another senior dealer, adding banks were also selling some dollars they had been holding to profit from the shilling’s recent fall.
The central bank has brought forward its monetary policy meeting to June 9, about a month earlier than originally planned, a move traders took as a signal that it could raise rates or offer other support for the currency. Njoroge, an adviser to a deputy managing director at the
Washington-based International Monetary Fund, was named by President Uhuru Kenyatta on Tuesday as the next governor. Parliament, where Kenyatta’s coalition has a majority, must vet him but is expected to give its approval.
This year, the shilling has been undermined by a stronger dollar, lower foreign exchange revenues due to a slump in tourism, and a ballooning current account deficit driven by demand for imports like capital goods.
