Is the shiling heading the 110 mark?

Posted on October 11, 2011

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The Kenya shilling has once again broken the barriers to exchange at Sh105 against the US dollar. This rate has once again sent shock waves to a market that is already volatile.

 Dealers have described the situation as crazy as panic buying now dictates the way for the shilling.

Interestingly, the pair dropped to the new levels as the Central Bank of Kenya governor was being put to task by a parliamentary committee over the same.

Already, fears are that the home unit might break more ground to upto Sh107 against the greenback in todays trading sessions. Three weeks ago, Africa Development Bank projected a peak exchange rate of Sh110 against the dollar.

Despite a robust attempt by the CBK last week to raise the CBR rate to 11 per cent, market players are saying this will take time to sink in and offer stability to the currency.

According to Reuters news agency, year to date the shilling has lost 29 per cent in value to the US dollar and is one of the worst performing currencies in the region.

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