Kenya shilling steady after key rate decision

The Central Bank of Kenya. The currency market saw little movement in exchange rates Wednesday in a flat reaction to the decision by the Central Bank of Kenya to keep the policy rate at 9.50 per cent. File 

By CHARLES MWANIKI, cmwaniki@ke.nationmedia.com

Posted  Wednesday, March 13  2013 at  16:51

The currency market saw little movement in exchange rates Wednesday in a flat reaction to the decision by the Central Bank of Kenya to keep the policy rate at 9.50 per cent.

Analysts had pointed at the Monetary Policy decision on the rate as the only market risk in this week’s currency trading following the peaceful conclusion of elections.

“The market had however already factored in that there would be likely no change in the rate announced by the MPC,” said Mr Joshua Anene, Senior Dealer at Commercial bank of Africa.

The shilling climbed marginally against the dollar in the CBK indicative rates Wednesday, listed at 85.47 buying, 87.42 selling and at a mean of 85.32.

It closed Tuesday’s trading at a mean rate of 85.58, where it consolidated gains made in Mondays trading which was the first session following the announcement of the Presidential election results.

According to Mr Anene, the local currency opened at CBA exchanging at 85.20/40 to the dollar, and stayed largely unchanged in the day’s trading to close at 85.25/45.

“Going forward for the rest of the week, we are cautiously optimistic that the shilling will continue its recent appreciation against the dollar,” said Mr Anene.

He said that investors may also have trimmed their long dollar positions which some may have held fearing the political risk of the general elections, which have passed without event.

Mr Peter Mutuku, a dealer at Bank of Africa, attributes the good performance of the shilling to a lack of dollar demand in the middle of the month.