NAIROBI (Reuters) – The Kenyan shilling jumped to its strongest level against the dollar in more than three-and-a-half years on Thursday, buoyed by increased hard currency inflows and a drop in demand for imports, traders said.
At 1141 GMT, the shilling traded at 99.75/95 per dollar, a level it last traded at in July 2015. It has been stuck tantalisingly close to breaking the 100 level in the past two months.
“The shilling is strengthening because flows are not getting absorbed by demand,” said a trader from another commercial bank.
A second currency trader at another commercial bank said there hadn’t been much demand for dollars by importers, offering further momentum to the currency.
Remittances, hard currencies sent abroad by Kenyans living abroad, surged to record highs last year, in step with earnings from the tourism sector, which also soared on the back of increased arrivals.
Reporting by John Ndiso; Writing by Duncan Miriri