NAIROBI: The Kenyan shilling strengthened on Wednesday, helped by dollar inflows from tea exporters and offshore investors seeking to buy government debt.
At 0910 GMT, commercial banks quoted the shilling at 89.05/89.15 to the dollar, compared with Tuesday's close of 89.15/25.
Traders said investors were selling dollars in preparation for this month's central bank Treasury bond auction.
"This ... sees offshore players start to sell dollars in the market in readiness for the auction," said Nahashon Mungai, trader at Kenya Commercial Bank.
"We've seen this morning some dollar inflows from the tea sector. So that's also been supportive."
Mungai said increased liquidity was also anticipated in the market due to expected spending by government departments, which could undermine the shilling.
The central bank sought to mop up 3 billion shillings in excess liquidity from the money markets on Wednesday. The bank's action partly supports the local currency by making it more costly to hold onto dollar positions.
Traders said they forecast the shilling to trade in the 88.80 to 89.30 range in coming days.
Comments
Comments are closed for this article.