NAIROBI: The Kenyan shilling on Monday extended gains for a seventh straight day as tight liquidity pushed banks to sell dollars and importers stayed away, waiting for further gains.
At 0722 GMT, commercial banks quoted the shilling at 93.20/40 to the dollar. The local currency quoted as high as 93.00/20 earlier, stronger than Friday's close of 93.30/50.
"Sentiments still remain for a stronger shilling mainly due to the tightness and importers are out of this market for now," said Kennedy Butiko, deputy head of treasury at Bank of Africa.
The shilling, which rallied 3.8 percent last week, has recovered almost 13 percentage points from its record low of 107 on Oct. 11, after the central bank raised its key lending rate sharply to combat inflation and exchange rate volatility, sending market interest rates soaring.
The weighted average interbank rate rose to 30.6687 percent on Friday -- the highest it has been this year -- from 30.0593 percent on Thursday, as banks competed for the few shillings in the money market.
Traders said they expected the shilling to firm further helped by Non-governmental organisations, tourism, horticulture and tea sectors selling the dollar.
They expected the shilling to trade in the 92.00-93.00 range during the session and said it could break through the psychological important 90 level by the end of the week.
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