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CURRENCY

Shilling slides marginally on high demand from oil marketers

In Summary

• The shilling has lost 1.14 per cent on year to date against the greenback, despite touching a three-and-a-half-year high of 99.60 on March 12.

Central Bank CBK Headquarters
Central Bank CBK Headquarters
Image: /FILE

The shilling on Monday slid marginally against the dollar, opening at 100.63 compared to 100.59 on Friday

Currency dealers have attributed the drop to heavy demand for the Shilling from oil marketers whose import bill is rising in tandem with rising global petroleum prices.

Fuel prices went up on March 14, with the Energy Regulatory Commission (ERC) attributing the rise to high importation costs and rising global prices.

"The changes in this month’s prices have been as a consequence of the average landed cost of imported Super Petrol increasing by 3.71 per cent from $548.20 per tonne to $568.55 per tonne,” read part of a statement.

Analysts are however confident on the shilling, with an expectation that demand and supply will at some point balance out due to the continued healthy inflows from the diaspora, horticulture exports and tourism.

The shilling has lost 1.14 per cent on year to date against the greenback, despite touching a three-and-a-half-year high of 99.60 on March 12.

A weak shilling is a boost for exporters who pocket higher earnings per unit sale, but a disadvantage to importers who are forced to spend more money to bring in goods.