The local currency traded flat holding at 3540/50, underpinned by ebbing demand from the main market players as economic slowdown continues on account of the domestic lockdown. The money markets however, remained awash with liquidity and the Central Bank was seen active undertaking open market operations.
In the fixed income market segment, yields on government short-term instruments changed course and slightly increased after a long spell of decline. This was likely as a result of market players pricing in a premium as some facets of the economy mainly government tax revenues remain at risk due to the pandemic. Yields printed at 6.999%, 9.000% and 10.250% respectively.
In the regional markets, the Kenya shilling was stable as supply and demand conditions were evenly matched .The shilling was quoted at 107.85/108:00.
The global markets saw the US dollar backtrack from a 3-month high against a basket of major currencies as investors took a cautious view on riskier assets, translating into increased demand for safe havens.
Outlook suggests that the shilling will likely hold at the current levels as muted demand from importers continues to underpin the currency. However, on the overall, the long dollar position in the market could sway the unit.
July 2 – July 9, 2021: Weekly financial markets review and outlook with Stephen Kaboyo
Stephen Kaboyo, Founder and Managing Director Alpha Capital Partners
