Shilling firm, awaiting dollar demand
30 September 2013, 16:22
Nairobi - The shilling was kept in positive territory by the fading effects of last week's infrastructure bond sale on Monday, but traders said it would come under pressure this week from importers buying dollars.
By 0731 GMT, commercial banks quoted the shilling at 86.30/50 per dollar, stronger than Friday's close of 86.40/60.
Duncan Kinuthia, head of trading at Commercial Bank of Africa, said foreign investors were still selling dollars to pay for the 12-year infrastructure bond worth 20 billion shillings auctioned in the middle of last week.
"Importers are waiting on the sidelines to see how far the shilling can gain before they come in to buy dollars," Kinuthia said.
The shilling firmed 0.9 percent last week, buoyed by dollar inflows for the bond, amid tight liquidity in the market, shrugging off an attack by Islamist militants at a Nairobi mall that killed dozens of people.
On money markets, the weighted average interbank lending rate rose for the 14th straight session on Friday, to 9.3857 percent, from 9.1203 percent on Thursday.
"For today we expect to see some dollar buying as importers take advantage of the dip (shilling gains)," analysts from Bank of Africa said in a daily note.