20 September 2012

Kenya: Shilling Extends Fall Against Dollar

The Kenya shilling slipped further yesterday as oil sector importers bought dollars, but it could benefit later in the day from farming exports and inflows into a 15-year Treasury bond, traders said.

At 0646 GMT, commercial banks quoted the shilling at 84.90/85.10 per dollar compared with Tuesday's close of


"There is still (dollar) demand from the oil sector. But (trading above) 85 may be difficult because there are sell

orders from tea and horticulture guys lined up above that," said Robert Gatobu, a trader at Bank of Africa.

Tea and horticulture exports are some of the leading foreign exchange earners for the east African nation, raking in a total

$2.5 billion in 2011.

Traders said dollar inflows from foreign investors into 15-year bond worth Sh15 billion and carrying an 11 per cent coupon,

would also support the shilling in coming days as buyers made their payments.

"The bond sale today is another reason we may not break 85.00. We may see inflows from foreign investors once the sale

is closed," Gatobu said.

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