Kenyan shilling stable, liquidity watched

NAIROBI: The Kenyan shilling was little changed on Tuesday although traders said rising liquidity in money markets could weaken the currency.

At 0645 GMT, the shilling was trading at 89.25/35 to the dollar, compared with Monday's close of 89.20/89.30.

Average overnight lending rates dropped to 5.9673 percent on Monday from 6.1625 percent on Friday, pointing to improved liquidity, which could weigh on the currency as it makes it slightly cheaper for banks to fund long dollar positions.

"That tells you the market's very liquid," said a trader with a leading commercial bank.

The central bank mopped up just under 14 billion shillings from the market on Monday using repurchase agreements (repo) and term auction deposit.