Kenya Airways rights issue payments lift shilling
Posted Friday, June 15 2012 at 12:41
The Kenyan shilling firmed against the dollar for a third straight day on Friday, lifted by foreign investors paying for Kenya Airways rights issue allocations, coupled with dollar inflows from the tea and horticulture sectors.
Kenya Airways raised 14.5 billion shillings ($170.69 million) from a $250 million rights issue that received a subscription rate of 70 per cent, it said last week.
At 0737 GMT, commercial banks quoted the shilling at 84.70/90 per dollar, 0.4 per cent stronger than Thursday's close of 85.00/20.
"There have been decent inflows from the agricultural guys and the Kenya Airways rights issue as foreign investors pay up
their allocations," said Chris Rwengo, a senior trader at Standard Chartered Bank.
Tea and horticulture are some of the leading foreign exchange earners for the east Africa nation.
Traders said they expected the shilling to firm further, to touch 84.50 per dollar, helped by the central bank's persistent liquidity mop-ups using longer tenure repurchase agreements.
They said most of the proposals from a budget speech read to parliament by the finance minister on Thursday were already factored into the shilling and might not have a major impact on the local currency.
"The budget did not outline measures that will address the shilling in the short term," said a trader at another commercial bank.