The shilling, which has gone down by 1.3
per cent against the US dollar to 2,178/74 since the year began, trades
under a tight pressure as demand outweighs inflows.
National Microfinance Bank, however,
said the manufacturing sector demand outweighed supply from agro inflows
and NGOs hence keeping the shilling at its toes.
“The shilling continues to weaken as
demand outweighs inflows,” NMB said in e-Market on Tuesday while quoting
the shilling closing the market at 2,176/2,206.
Another bank, CRDB, quoted the shilling closing the same day flat against the dollar at 2,186/96.
“There is no major inflow or outflow
expected hence the pair is expected to remain flat at same level,” CRB
market highlights said.
BoT on its Monetary Policy Statements
shows that from July 2015 to April 2016, despite a general shortfall in
foreign exchange inflows compared to similar period of 2014/15, the
shilling remained fairly stable, after experiencing high volatility in
the last quarter of 2014/15.
“The stability was mostly explained by
prudent fiscal policy, and sustained tight monetary policy measures
implemented by the Bank,” BoT said.
Meanwhile, CRDB said interbank money
market showed some improvements in liquidity on Tuesday with volume up
by 5.0 per cent to 11.3bn/- while weighted average rate fell by 115
basis points to close at 14.25 per cent.
The Central Bank announced a REPO worth
160bn/- that was undersubscribed by 46 per cent. Tendered amount was
75.05bn/- with a high of 16 per cent.
Weighted average rate fell by 142 basis points to 14.38 per cent suggesting an ease in market liquidity.
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