Kenya shilling steady, seen vulnerable on excess liquidity
Kenyan shilling was steady on March 13, 2014, and traders said it was likely to stay capped within a range although excess liquidity, if it remained, could exert downward pressure on the currency. FILE
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Traders said if the Central Bank of Kenya (CBK) mopped up excess liquidity, as it has done since last week, making it expensive to hold long dollar positions, the shilling would strengthen.
Kenyan shilling was steady on Thursday, and traders said it was likely to stay capped within a range although excess liquidity, if it remained, could exert downward pressure on the currency.
At 0803 GMT, commercial banks quoted the shilling at 86.40/50 per dollar, unchanged from Wednesday's close.
Traders said if the Central Bank of Kenya (CBK) mopped up excess liquidity, as it has done since last week, making it expensive to hold long dollar positions, the shilling would strengthen.
"Demand and supply are well-matched, but excess liquidity is keeping the shilling on the back foot," said Sheikh Mehran, senior trader at Kenya Commercial Bank. "I think they (CBK) could be coming in again to mop up."
On Wednesday, CBK was in the market and mopped up Sh6.1 billion at a weighted average rate of 6.276 per cent. It had sought to mop up Sh10 billion, CBK data showed.
The shilling, which has gained 0.35 per cent versus the dollar so far this year, is expected to trade in the 86.20 to 86.60 range in coming days, traders said.
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