Kenya’s shilling steady against the dollar
Kenya’s shilling was little changed against the dollar on Thursday, with dollar demand from the telecoms sector offsetting the impact of two central bank interventions earlier in the week.
At the close of trade , commercial banks quoted the shilling at 105.40/50, barely changed on Wednesday’s close of 105.35/50.
Kenya’s central bank intervened in the market on Monday and Tuesday, selling substantial quantities of dollars to boost the shilling as the local currency edged closer to its record low of 106.80, set in October 2011.
“Today has been thin on volumes but a few companies from the telecoms sector were buying (dollars),” said a trader at one Nairobi-based commercial bank.
It was not immediately clear why the telecoms firms were buying. Traders say the central bank’s sale of dollars has stemmed shilling losses, for now, and expect the threat of further interventions to weigh on the minds of market players.
“The central bank came in a big way, and after such an intervention people are usually cautious,” added the trader.
The shilling, down about 16.5 percent against the dollar this year, has come under pressure from a broad rally in the dollar, Kenya’s large current account deficit and weak foreign currency inflows from tourism after a number of attacks by Somalia’s al Shabaab insurgents.
The benchmark NSE20 share index was barely changed, drifting 2.11 points lower to close at 4,217.78 points.
On the secondary market, government bonds valued at 687 million shillings ($6.52 million) were traded, down from 1.1 billion the previous day.
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