Money Markets
The currency of east Africa's biggest economy has been trading in a tight band of 86.80-87.00 in recent days. Photo/FILE
By Reuters
Kenya's shilling held steady
on Wednesday and traders said it was likely to firm against the dollar
in the next few sessions due to an anticipated fall in corporate
appetite for greenbacks.
By 0830 GMT, commercial banks
posted the shilling at 86.80/87.00 per dollar, matching where it closed
on Tuesday. The currency of east Africa's biggest economy has been
trading in a tight band of 86.80-87.00 in recent days.
"However, going forward as the
demand settles out of the market, we project that the shilling will
recoup some of its losses and probably trade around the 86.50 to 86.80
range,” said one senior trader with a leading commercial bank.
The central bank's rate-setting
committee meets later on Wednesday. All 10 of the analysts polled by
Reuters, before inflation figures were released at 0800 GMT, forecast
rates would be kept at 8.5 per cent.
Kenyan inflation inched higher to 6.41 per cent
in April, but not enough to change rate forecasts, analysts said. Even
so, traders said a surprise small cut would not impact the shilling.
"It's a demand-driven currency.
Because the central bank continues to mop up excess liquidity, we don't
foresee a case where a rate cut would impact the shilling negatively,"
said the senior trader.
The central bank said on
Wednesday it was seeking to drain Sh10 billion from the money market - a
stance it has taken this year to shore up the local currency.
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