The shilling was seen clinging to a one week solid position against the dollar as corporate tax remittance took away appetite for dollars.
Bids and ask quotes held at 3710/20.
In Kenya, the unit continued to be pressured by energy sector demand for forex, driving the shilling to a low of 136.70/90
In the fixed income market, yields on treasury bills were flat with BOU cutting off rates that exceeded their tolerance levels. As a result of the country’s weaker financial position confirmed by the multiple downgrades by credit agencies, investors for some time now have been demanding higher yields to compensate for increased credit risk.
In the international markets, the US dollar strengthened against other major currencies as economic data pointed to a slowing US economy, reinforcing the markets view that the Fed is likely to pause interest rate hikes.
In the coming days the shilling is expected to hold in a relatively tight range with markets activity remaining thin, however as we count down towards the budget pronouncements, it is likely that market players will realign their rate expectations.
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