NAIROBI: Kenya's shilling firmed in early trade on Thursday helped by dollar inflows from this week's tea auctions, but traders said they still expected the local currency to weaken.
By 0716 GMT, the shilling was trading at 91.45/65 to the dollar, compared with Wednesday's close of 91.50/60.
The shilling, which weakened steadily through last year and since the start of this year, has been stable for the past few days helped initially by tight shilling liquidity due to last week's bond sales and then supported by this week's tea inflows.
"It has been a good week for the shilling due to those factors," said Chris Muiga, a senior trader at National Bank of Kenya, but he said these would only offer temporary respite.
"Once those factors are out of the way, you could probably head back to the higher (weaker) levels," he said, adding 92 to the dollar was now in sight although he did not expect a swift move to that level.
Another trader noted weak dollar demand from companies which tend to seek foreign exchange towards the end of each month had also lent support to the local currency.
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