Dollar profit-taking lifts shilling from multi-year low

Money Markets

The shilling had fallen to that level mainly due to end month demand for dollars from importers. PHOTO | FILE 

By REUTERS

In Summary

• Traders said they were keenly following events in the euro zone ahead of a referendum called by Greece because any weakening in the euro could put pressure on the shilling.

The shilling strengthened against the US dollar on Thursday as profit-taking in the US currency helped to raise the shilling from its lowest level in three years and eight months hit in the previous session.

At 0748 GMT, commercial banks posted the shilling at 99.10/20, slightly firmer than Wednesday's close of 99.30/40, a level last seen in October 2011.

The shilling had fallen to that level mainly due to end month demand for dollars from importers, which had receded after most orders were filled, market participants said.

READ: Shilling touches new low of 99.22

"Guys were quite long on dollars so they are taking profits," one trader at a commercial bank said.

Liquidity in the money market had also improved in the last few days, accelerating the shilling's downward momentum, although the central bank tried to slow it by seeking to mop up huge amounts of cash through repurchase agreements.

Traders said they were keenly following events in the euro zone ahead of a referendum called by Greece because any weakening in the euro could put pressure on the shilling.