NAIROBI: The Kenyan shilling held steady against the dollar on Monday, but some traders said it could weaken with end-month importers' demand for greenbacks, while the central bank was expected to defend the local currency to counter any big fall.
The shilling, which is up 2.3 percent this year after recovering from its lowest level of 107 per dollar hit in October, thanks to a tight monetary policy, has been stuck in a range for three straight sessions, oscillating within 83.00-83.50.
At 0810 GMT, commercial banks posted the shilling at 83.20/40, barely changed from Friday's close of 83.10/30.
"Demand is weak, but towards the end of the week it could pick up," said Dickson Magecha, a trader at Standard Chartered Bank.
"Because of the high interbank rate, it's expensive to hold dollar positions," said Magecha, citing this as a factor helping to stabilise the local currency.
The average interbank rate has been on a steady rise, reaching 18.3 percent on Friday, from 17.5 percent a day earlier.
It is off a low of 10 percent on April 5, which caused the central bank to absorb excess liquidity totalling 31.65 billion shillings ($380.18 million) in the last two weeks.
A Commercial Bank of Africa report said there had been low volumes on the dollar supply and demand counters for the better part of the month.
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