Kenyan shilling steady, supported by high debt yields

The Kenyan shilling was broadly stable on Monday, supported by unusually high government debt yields that helped offset the global strength of the U.S. currency.

At 0705 GMT, commercial banks posted the shilling at 103.00/10, barely changed from Friday’s closing rate of 102.95/103.05.

“The market is flat,” said a trader in one Nairobi-based commercial bank.

“We believe the market has entered a consolidating phase and the shilling will stay in a tight range, between 103 to 103.50.”

The shilling, which has lost 14 percent against the dollar this year, has firmed in past two weeks due to dollar inflows from offshore investors attracted by the interest rates of more than 20 percent on government Treasury bills.

Traders said there was also lower demand for dollars, as importers waited to see how far the shilling will strengthen. (REUTERS)