Today the Kenya Shilling has strengthened for a third consecutive day against the US Dollar, as the MPC is set to meet tomorrow to review key monetary policy affecting the local currency.
The Kenya Shilling is today exchanging at KES 84.03 against the US Dollar improving 0.1% from yesterday’s rate of KES 84.12 Data from the Central Bank of Kenya shows. Yesterday’s rate had climbed 0.01% from Monday’s rate of KES 84.13 to the Dollar.
The strengthening of the Shilling this week is due to lower dollar demand by investors as they await the interest rate decision by the Monetary Policy Committee (MPC) which is set to meet tomorrow according to a news report by Reuters.
Furthermore, the report adds that the Shilling been boosted by inflows from the agricultural sector’s exports such as tea, which is a main foreign exchange earner for the East African region.
Tomorrow’s MPC meeting will be the committee’s first since Kenya’s inflation dropped to this year’s lowest rate of 10.05% last month according to data from Kenya National Bureau of Statistics.
On December 1st last year, the MPC increased the CBK lending rate to 18% to improve the Shilling’s foreign exchange position which was exchanging at KES 90 to the US Dollar in late November, data from the CBK shows. Since then, the local currency has gained more than six shillings against the Dollar, appreciating against all major currencies in the week ending June 29th according to a weekly report by the CBK.
“It is expected that the MPC will start cutting rates and this could positively feed into the market”, said Samora Kariuki, a Research Analyst at NIC Capital Securities while referring to the possible outcome of tomorrow’s MPC meeting on the interest rates and stock market.
Pesatalk will keep you updated on the outcome of tomorrow’s MPC meeting and any subsequent impact on the Kenya Shilling’s performance.