NAIROBI: The Kenyan shilling was steady on Thursday and traders said they expected it to keep the trend in coming days, barring consumer price inflation figures rising beyond the central bank's target level.
At 0750 GMT, commercial banks quoted the shilling at 87.80/90 to the dollar, compared with Wednesday's close of 87.70/90.
Traders said they were keeping an eye on July's inflation data, due to be released on Thursday, with any significant rise above 7.5 percent likely to put pressure on the central bank to raise its benchmark lending rate.
The government's aim is to keep inflation at 5 percent, plus or minus 2.5 percentage points in the medium term.
"If it's extremely out of that range; if it's material, probably the market may anticipate a rate hike and we may see the shilling rallying," Chris Muiga, senior trader at National Bank of Kenya, said.
"But that is if the outcome is quite significant, quite out of the range of expectations."
Year-on-year inflation rose slightly to 7.39 percent in the year to June from 7.30 percent in the previous month. The consensus estimate is for 7.63 percent, a Reuters poll showed.
Traders predicted the shilling, which has lost 1.4 percent against the dollar so far this year, would trade in the 87.50 to 88.00 range in coming days, a band it has stayed in for the past one and a half months.
Comments
Comments are closed for this article.