Shilling Appreciates Amid Inflows From Cashew Nuts

The local market has recently been characterized by a large inflow from the cashew nut industry, and this has contributed hugely to the Shilling’s appreciation against the US Dollar. According to an e-market report by the NMB, a huge appetite has been observed from telecom, manufacturing, SME and construction importers, and the markets closed at the 2165/2195 level.. The market is still showing liquidity as a result of government securities maturities and government spending, and overnight, the market weighted with an average flat with a 13.41% high. Liquidity within the interbank money market has also seen improvement as the rate of borrowing has fallen to 12.86% – a fall of 55 basis points from the rates of the previous day, however the overall volume that was traded amongst banks dropped by 25%, being recorded at 10.5 billion. Improvements in liquidity are now expected to remain fairly stable as the year draws to an end. On Monday, the Kenyan shilling weakened against the US Dollar because of an increase in the demand from multinational companies for US Dollars with which to make divided payments. The Shilling was quoted at 101.65/85 to the US Dollar at 7:17 AM GMT according to the commercial banks, compared to 101.50/70 at the close of the markets on Friday. The current losing streak of the Ugandan shilling continued on Monday, with the currency being hit by the commercial bank and energy sector firms’ high demand for the US Dollar.