NAIROBI: The Kenyan shilling firmed against the dollar on Thursday, buoyed by increased greenback inflows from offshore investors buying government securities, traders said.
At 0719 GMT, the unit was quoted by commercial banks at 82.65/85, stronger than Wednesday's close of 82.90/83.10.
The shilling had risen to an intraday high of 82.30/50 to the dollar.
"Foreign flows coming into the bond market caused a rally in the shilling this morning, before profit-taking by interbank players weakened it a bit," said Dickson Magecha, a trader at Standard Chartered Bank.
High yields on government securities have fuelled foreign demand, especially for short-dated paper, leading to high subscription rates and bringing dollars into the country.
Kenya's one-year Treasury bond auctioned on Wednesday forced the weighted average yield lower to 18.030 percent from 21.082 a month earlier, and the central bank said the paper had attracted a 348 percent subscription rate.
Technical charts showed the shilling's resistance level at 82.50 per dollar and a break below it could usher in highs of 81, traders said, a level last seen more than a year ago.
They said the local currency could strengthen further aided by rising interest rates in the money market, as banks compete for the few shillings available, as well as inflows from tea - the east African country is the world's top exporter of black tea.
The weighted average interbank bank rate rose for the ninth straight day to 21.6 percent on Wednesday from 20.8 percent on Tuesday.
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