NAIROBI: The Kenyan shilling held steady against the dollar on Tuesday in thin volumes, with market activity subdued ahead of a central bank rate decision, while bargain hunters led stocks up.
Six of nine analysts polled by Reuters said the central bank was likely to hold its key rate unchanged for the fourth month in a row on Wednesday after inflation fell less than expected in March and food prices rose from February. The other three forecast a cut.
At close of market at 1300 GMT, commercial banks quoted the shilling at 83.00/20 per dollar, unchanged from Monday's close.
"It (shilling) weakened a bit during the session due to mild (dollar) demand from the energy sector, but stabilised after some exporters came in to take profits," said Peter Mutuku, a trader at Bank of Africa.
Duncan Kinuthia, head of trading at Commercial Bank of Africa said the market had priced in a steady rate.
Sameer Lagadia, head of trading at Diamond Trust Bank echoed his thoughts: "If the central bank holds the rate steady, the market will remain steady. But the shilling will weaken if there is a rate cut."
The shilling is up 2.4 percent this year, supported by tight monetary policy. The shilling tumbled to a record low of 107 to the dollar in October before a series of aggressive rate rises helped it recover.
On the Nairobi bourse, the main NSE-20 Share Index rose 0.8 percent to 3,392.23 points on thin volumes as bargain hunters stepped in, Gregory Waweru, an analyst at Kestrel Capital, said.
Athi River Mining, lead the gainers but on thin volumes, climbing 5.6 percent to 170 shillings ($2.05).
Corporate and government bonds worth 229 million shillings were traded, up from 238 million shillings.
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