Shilling hovers around 4-month high
09 October 2013, 13:50
Nairobi - The shilling hovered around a four-month high of 84.80/85.00 on Wednesday as tea importers sold dollars after a recent rally in the local currency.
The shilling has risen 3 percent in a little over two weeks, spurred by demand for Kenyan government debt and equities at a time the political impasse in the United States over the budget has weakened the dollar.
Peter Mutuku, head of corporate trading at Bank of Africa Kenya, said the fact the central bank had not stepped in to ease money market liquidity suggested the regulator was satisfied with the shilling's level.
Analysis of the shilling's 14-day and 50-day weighted moving averages show the currency is expected to keep gaining in the near term. Traders anticipate resistance for the shilling at 84.50.
"When the market opened, (the shilling) immediately weakened, touching 85.00/85.20 and then it bounced back when tea importers came snooping around," said Mutuku.
At 0830 GMT, commercial banks quoted the shilling 84.80/85.00, matching Tuesday's close.