Kenya and Tanzania’s shillings are set to benefit from dollar inflows from their tourism sectors as the safari season reaches its peak.
Kenya’s shilling is seen firming slightly in the days ahead, helped by the central bank’s aggressive mop up of liquidity via repurchase agreements (repos) and dollar inflows from a peaking tourism season.
At early trade yesterday commercial banks quoted the shilling at 84.05/15 per dollar, barely changed from last Thursday’s close of 84.00/20.
The central bank has increased the amount it has been absorbing this week as it moves to support the shilling. Higher liquidity makes it cheaper for commercial banks to hold long dollar positions, traders said.
The peak period for Kenyan tourism, which earned a record $1.2 billion in 2011, stretches between July and August, mainly due to the influx of tourists who come to watch the world famous wildebeest’s migration in the Maasai Mara reserve.
Tanzania’s shilling is expected to gain ground against the dollar in the days ahead, buoyed by inflows from the tourism and agriculture sectors and subdued demand for the greenback.
Commercial banks in Dar es Salaam quoted the shilling at 1,574/1,579 to the dollar on Thursday, stronger than 1,572/1,582 a week ago.
The Bank of Tanzania said on its website that it traded $33.35 million on the interbank foreign exchange market over the past week.
AUTHOR: BEN GUMO
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