Shilling steady as businesses close ahead of Obama visit

The Kenyan shilling was stable on Friday as businesses shut their doors or cut their working hours due to the closure of major roads for the visit of US President Barack Obama.

At 0630 GMT, commercial banks posted the shilling at 100.75/85 per dollar, barely changed from the previous day’s closing rate of 100.60/80.

“Today we don’t expect too much movement as most businesses are closed or doing half a day,” said a trader at a commercial bank.

Major thoroughfares in Nairobi will be closed to the public for several hours in the afternoon when Obama arrives to attend an entrepreneurship summit.

Kenyan financial markets will also close hours earlier than usual due to the disruptions caused by the visit.

The shilling has benefited this week from a liquidity squeeze in the money markets that forced banks to cut their hard currency holdings to meet their local currency funding needs.

The weighted average interest rate on the overnight borrowing market for banks soared to 16.3769 per cent on Thursday from 15.4220 per cent the previous day.