Kenyan shilling flat, seen vulnerable

NAIROBI: The Kenyan shilling was steady on Monday but was seen vulnerable if the tight money market conditions ease up, traders said.

At 0705 GMT, commercial banks quoted the shilling at 88.05/88.15 to the dollar, unchanged from its closing level on Friday.

The shilling has been supported by tighter conditions on the interbank market, where the weighted average lending rate rose to 11.9492 percent on Friday from about 7.5 percent in mid-July.

Commercial Bank of Africa trader Joshua Anene said the shilling looks vulnerable as the currency had been weakening over the past two weeks even though liquidity has tightened.

"That tells you that if money market conditions improve, and the rates come down, then the shilling should come under pressure," he said.

Anene added that the central bank may once again intervene if the shilling continues weakening.

<Center><b><i>Copyright Reuters, 2010</b></i><br></center>