The Kenyan shilling jumped against the dollar on Friday as offshore players and banks trimmed their dollar positions, helping the local unit recoup steep losses incurred in previous sessions. The commercial banks posted the unit at 77.80/78.20 per dollar compared to Thursday's closing rate of 79.80/90.
Traders said the unit was likely to give up some of those gains before the end of the session with next week seen ushering in more volatility on the back of importer appetite for greenbacks and speculative activities by traders. Traders said it was not clear what sparked the dollar selling that helped the shilling bounce back after taking a pummelling for four straight sessions.
"There is speculative trading and there is no demand. When the rate reversed, there was a bit of panic in cutting positions, banks seem to have been holding long positions," said Stephen Lagat, a CFC Stanbic dealer. Commercial Bank of Africa's Charles Githiomi said it was not clear why the shilling was strengthening while Kennedy Butiko of Bank of Africa said offshore players were offloading dollars. "There is heavy selling from offshore accounts. Next week we expect wild swings all over, depending on demand," said Butiko.
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