Commercial banks were quoting the shilling at an average 101.85 in the interbank market Tuesday, having gained 35 cents from Friday, when it was exchanging at 102.20 units to the dollar. Last week the shilling had opened trading at an average of 101.80. A spike in dollar demand from corporates towards the end of the week as businesses resumed operations weighed in, however, pushing it above the 102 level raising fears of a round of volatility. Traders said inflows from agriculture exports and remittance have also helped balance out dollar supply and demand this week, giving the shilling headroom to regain some of the lost ground. “The shilling had an ally at the opening of the week, in the form of weak foreign currency demand, resulting in the local currency edging higher against the dollar,” said Commercial Bank of Africa in a currency market note.

Source: Daily Nation January 08, 2019 18:56 UTC