The Star (Nairobi)

28 June 2012

Kenya: Shilling Firms Up Against Dollar but Likely to Drop

The Kenya shilling inched up yesterday, supported by buying by exporters in the agricultural sector, but the currency could dip in coming days as demand for dollars from energy sector importers picks up, traders said. At 0742 GMT, commercial banks posted the shilling at 84.10/25 to the dollar, compared with Tuesday's close of 84.15/35.

Traders said increased shilling liquidity in the market would also weigh on the local currency. "Last week the market was very tight and that helped the shilling. This week we are seeing improved liquidity," Chris Muiga, senior trader at Kenya Commercial Bank, said. "Also, it's the end of the month, so we see quite a bit of demand from the energy sector especially. So we could see some rally in the dollar based on that."

Traders will also be on the lookout for possible action by the Central Bank in support of the shilling via repurchase agreements, having been absent from the market since June 19. Traders said they expected the shilling to trade in the 83.75-84.50 range in coming days.

Ads by Google

Copyright © 2012 The Star. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.