Currencies
Shilling gains against dollar after sale of new Eurobond
Wednesday February 14 2024
Confidence the 2024 Eurobond would be repaid has helped stop panic buying of foreign currency, traders say. File | Shutterstock
The shilling extended gains on Wednesday, hitting its strongest in more than three months as confidence the government would pay off a Eurobond maturing in June buoyed investor appetite.
The shilling strengthened over three percent against the US dollar to reach 150.00/151.00, a level it last traded at on October 26, compared with Tuesday’s close of 155.50/156.50 to the dollar, LSEG data showed.
Earlier this week Kenya sold a new $1.5 billion Eurobond maturing in 2031 which it will use to buy back via a tender offer a large chunk of the $2 billion international bond due in June.
Read: Kenya pays dearly to avoid Sh316bn Eurobond default
One trader said confidence the 2024 Eurobond would be repaid had helped stop panic buying of foreign currency that has seen the shilling set repeated record lows since late 2021.
Other factors supporting the currency include foreign inflows into a Sh70 billion infrastructure bond on sale and the central bank talking up the shilling as it raised interest rates again last week.
The tender offer for the 2024 Eurobond expires on Wednesday, with the results expected on Thursday.
