The Kenyan shilling rallied yesterday for a sixth session to trade at its strongest level so far this year, four days ahead of presidential and legislative elections. At 0908 GMT, Thomson Reuters data showed the shilling firmed 0.8 per cent during the session to strike an intraday high of 85.60 against the dollar, last reached on December 27, 2012.
"The shilling is strengthening on account of previously being heavily overbought. The demand side is not much as the market had anticipated ahead of Monday's vote," said Raphael Owino, assistant general Treasury manager at Commercial Bank of Africa. Fear of unrest after these elections has seen some businesses slow down their operations.
The Central Bank has been intervening to support the shilling by mopping up excess liquidity from the money markets on an almost daily basis, while occasionally selling dollars to banks. Market players said a smooth handover of power could boost the shilling further, though gains could be checked as importers resume full operations after the vote.