A currency dealer counts Kenya shillings at a money exchange counter in Nairobi October 23, 2008. REUTERS/Antony Njuguna
The Kenyan shilling has recently eased due to increased dollar demand from companies across all sectors to meet their obligations before they close for the holidays, while stocks have risen.
At the close of trade, commercial banks quoted the shilling at 102.35/45, compared with Tuesday’s close of 102.20/30.
“We saw some demand early in the day. We just had a number of corporates closing in their end-year obligations before they close for the end-year festivities,” said a trader at one commercial bank.
According to the trader, many firms have been treading cautiously ahead of the U.S. rate decision. If the Federal Reserve does raise rates, it would put pressure on emerging market currencies as investors sell riskier assets. “Markets are just positioning themselves at least until the event is over,” he said.
The U.S. Federal Reserve is expected to make the first of potentially a series of interest rate hikes on Wednesday, after years of easy money policies.
On the Nairobi Securities Exchange (NSE), the main NSE-20 Share Index was up 24.09 points to close at 4,011.66 points.
However, on the secondary market, government bonds valued at 553.7 million shillings were traded, down from 1.01 billion shillings on Tuesday.
