In an interview with one of the
local business dailies, Gachora said economic fundamentals don’t explain why
the Kenya shilling is stabilizing against the dollar.
“It’s hard to say because the fundamentals are not explaining the performance of the shilling.
"Obviously, there is a good explanation in that we got quite a significant amount of dollars coming from the infrastructure bond.
"The performance of the Eurobond also created some confidence.
"That can only go so far, however. Because of the
expectation that the shilling will get stronger, the demand for dollars has
gone down significantly, it’s not necessarily that we have seen more supply and
this has driven the shilling,” Gachora said.
“I think the demand will come back because people will need to trade.
"Perhaps, what was bought and built up is what’s in use.
"Very soon they will come back for more and we will see the shilling going back to its true value.
"We don’t know the true value but
certainly it’s not where it was, I also don’t think it’s where it is at the
moment, it's somewhere in the middle,” Gachora added.
On Thursday, the shilling was
trading at 131.00/132.00 to the greenback, slightly firmer than its Wednesday’s
close of 131.50/132.50.
The Kenyan DAILY POST
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