NAIROBI: The Kenyan shilling was steady on Thursday, with traders expecting it to strengthen because of foreign investors selling dollars to pay for Treasury bonds auctioned in the previous session.
At 0822 GMT, commercial banks quoted the shilling at 83.65/85 against the dollar, the same level it closed at on Wednesday.
"Demand (for dollars) is muted for now, but we expect to see offshore investors coming in to sell dollars today and tomorrow before the payments fall due on Monday," said Julius Kiriinya, a trader at African Banking Corporation.
The central bank auctioned five- and 15-year bonds worth a total of 25 billion shillings ($298.51 million) on Wednesday. It received bids worth 56.6 billion shillings and accepted 35.8 billion shillings.
"Most of these bids were from offshore people looking for good rates in Kenyan debt," said Robert Gatobu, a trader at Bank of Africa. "The shilling could firm on these flows."
Demand for Kenyan assets has increased since the March 4 presidential election, which went off peacefully, in contrast to a disputed vote five years ago that was followed by violence in which 1,200 people died.
The shilling has firmed 2.9 percent so far this year, mainly due to the calm presidential vote.
The central bank said it was in the market on Thursday to mop up 10 billion shillings via repurchase agreements. The bank has actively soaked up liquidity since last year to support the shilling by making it slightly more expensive to fund long dollar positions.
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