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Exchange rates

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The Kenya Shilling remained unmoved around 101.80/102.00 levels against the US Dollar during the week. Muted demand for Dollars from importers saw the Shilling hold its current levels despite upbeat Dollar prospects in the global markets. The Shilling may ease in the coming week against the Dollar as importers cover end month payments and companies buy Dollars as we head into the holiday season.

British Pound advanced against US Dollar on Friday after release of positive UK GDP data.  Quarter on quarter (QoQ) GDP and year on year (YoY) GDP data came out unchanged at 0.5% and 2.3% respectively. The data though unchanged shows resilience of UK economic performance in the wake of uncertainty surrounding BREXIT. Business investments is estimated to have rose by 0.9%, imports decreased by 1.5% while exports increased by 0.7%. The Pound may advance against US Dollar in the coming week if data out prints from the UK continue being impressive.

Euro zone common currency slightly appreciated against US Dollar on Friday after being hammered to its lowest levels this year during the week. European Central Bank (ECB) and Federal Reserve (FED) divergent monetary policy stance and BREXIT woes dampened prospects of a stronger Euro.

The coming week is loaded with economic data releases among them are ECB President Draghi’s speech, Euro zone CPI data and market manufacturing PMI data from UK, Euro zone and US.

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Key benchmark interest rates

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Interbank lending rate increased by 01.122% from 4.7985% to 5.9206%. Volume traded averaged 14.085 billion during the week.

91 day T-bill rate rose by 0.126% from 8.200% previous week to 8.326%. CBK offered a total of Kshs 4 billion. Bids amounted to Kshs 5.911 billion of which Kshs 5.908 billion were accepted.

182 day T-bill rate rose by 0.053% from 10.318% previous week to 10.371%. CBK offered a total of Kshs 6 billion. Bids amounted to Kshs 6.936 billion of which Kshs 6.915 billion were accepted.

364 day T-bill rate rose by 0.008% from 10.817% previous week to 10.825%. CBK offered a total of Kshs 6 billion. Bids amounted to Kshs 5.316 billion of which Kshs 3.266 billion were accepted.

CBK was in the market to inject 22 billion shillings during the week via reverse repos. The regulator managed to inject a total of 15.923 billion shillings at a weighted average rate of 10.03%.

Volume on t-bill bids increased in the 91 days auction participation but decreased in the 182 days and 364 days auctions during the week. T-bill rates may hold steady or rise in the coming week.

The graphs below depict visual movement of the interbank rates.interbank_rates_25-11-20161The graphs below depict visual movement of the T-bill rates.

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Posted by Timothy II Aperit

True believer in numbers. Statistics never lie. Bsc Financial Engineering MBA Finance ACCA