Central Bank - which has stayed out of the market all week - is unlikely
to inject money into the market to ease the shortage of local currency.
PHOTO | FILE
NATION MEDIA GROUP
By REUTERS
In Summary
- Traders expect the shilling - which has lost 1.1 per cent so far this year - to trade in the 91.50 to 92.00 range against the dollar in coming days.
The Kenyan shilling was steady against the dollar on
Friday with dollar demand restricted by tight local currency liquidity
that has led to .............................
rising interbank lending rates.
rising interbank lending rates.
At 0743 GMT, commercial banks quoted the shilling at 91.65/75 to the dollar, from Thursday's close of 91.60/70.
Traders said there was importer dollar demand but
tight shilling liquidity had kept the local currency from weakening.
They said the central bank - which has stayed out of the market all week
- was unlikely to inject money into the market to ease the shortage of
local currency.
Tight liquidity makes it slightly more expensive for banks to hold dollars, thus cushioning the shilling.
On the interbank market, the weighted average
lending rate rose to 8.4987 per cent on Thursday from 8.3325 per cent a
day earlier, while volumes borrowed fell slightly to Sh27.42 billion
from Sh27.8 billion a day earlier, showing an there was still a
liquidity squeeze.
"No movement this morning. I guess the shilling is
still getting support from overnight rates going up," a senior trader at
one commercial bank said.
Traders expect the shilling - which has lost 1.1
per cent so far this year - to trade in the 91.50 to 92.00 range against
the dollar in coming days.
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