On Thursday, 8th of February 2018, the Kenya Shilling reached a 20- months high against the US dollar.
This is because there was an increase in sales of flowers for the Valentine’s Day coming up on the the 14th of February. There was also an increase in foreign investment in government bonds.
“Dollars in circulation from offshore investors and horticulture exporters are meeting the usual demand,” a commercial bank trader told Reuters.
As at Thursday, the Kenya shilling traded at 100.70/90 per dollar compared to 101.80/102.00 it traded last Thursday. Even though the new shilling is at a new high it is yet to hit the 100.55/65 recorded in June 2016.
“There have been strong flows targeting the infrastructure bond and the general market sentiment is bullish on the shilling,” said Raphael Agung’, head of treasury at Commercial Bank of Africa.
Since the beginning of this year the Kenya Shilling gained 2.16 per cent against the US dollar and it has remained steady against the Dollar. In 2017, it also emerged the most stable currency in Sub Saharan Africa.
“The Central Bank of Kenya’s FX operations are simply off the charts, especially when you consider we have a freely convertible currency which is something of a rarity in SSA these days,” said Aly-Khan Satchu, the chief executive of Nairobi-based data vendor Rich Management.
The Central Bank of Kenya (CBK) foreign exchange reserves stands at $7.108 billion (Sh 717.91 billion) currently and this is sufficient enough to handle any volatility the shilling might face.
What you didn’t know about Kenya’s Horticulture
The fastest growing sub sectors in Kenya is Horticulture with an annual growth rate of 7 percent. In terms of foreign exchange earning, the sub-sector is ranked third after tourism and tea.
The major areas where Kenya horticulture is practiced include around Lake Naivasha where companies such as Oserian handle flower plantations and the main flowers exported are roses and orchids. The Demand for Kenyan Flowers is always highest during the Valentine period.
In 2017 it saw about 23 percent increase in cut flower sold and the main European market for Kenya’s horticultural products include the Netherlands, Britain, Belgium, Australia and France.
Figures from the Australia’s Federal Department of Agriculture in 2017 showed that Australia imported more than 5.22 million rose stems in February 2017.
Apart from exporting, Kenyans from all walks of life are also expected to treat their loved ones during the Valentine’s Day by purchasing flowers and other romantic items.