Kenyan shilling flat, eyes on the central bank

NAIROBI: Kenya's shilling was treading water against the dollar on Friday, with traders expecting central bank liquidity mop ups to prop up the local currency over coming days.

Leading commercial banks at 0730 GMT quoted the shilling at 86.35/55, unchanged from Thursday, in thin volumes.

The Central Bank of Kenya (CBK) has frequently drained liquidity over the past month after overnight borrowing rates tumbled. The falling overnight rate made it cheaper for banks to fund long dollar positions and put pressure on the shilling.

"With the way the markets are quiet and the way CBK is still mopping up, we might see the market come slightly down (strengthen). The shilling will be supported," said I&M Bank trader Eric Gathecha.