NAIROBI: The Kenyan shilling, unchanged to the dollar, was expected to draw support on Tuesday from anticipation of inflows related to a sale of Treasury bonds on Wednesday.
At 0635 GMT, commercial banks posted the shilling at 86.45/55, unchanged from Monday's closing level. The currency would oscillate within a narrow band on Tuesday, traders said.
"The market is fairly stable, it has been for days. We expect the bond may attract some offshore buyers and those flows may trigger the shilling to strengthen a little," said a senior trader at a leading bank who declined to be name.
The Central Bank of Kenya will auction up to 10 billion shillings ($115.61 million) worth of 5-year bonds on Nov. 20.
Overnight rates on the shilling dropped to 9.4041 percent on Monday from 13.30 percent a week ago, aided partly by a central bank move to inject liquidity using reverse repurchase agreements.
Still, that was a touch higher than the 9.1822 percent seen on Friday, giving the Kenyan currency some support.
"The overnight rate went up a little bit, and that paused the weakening of the shilling," Chris Muiga, a trader at National Bank, said.
"Not much is going on to unsettle the market, liquidity is now back and there are no fresh factors to change the equilibrium."
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