Shilling steady, Bond auction may attract foreigners
17 March 2014, 11:06
Nairobi - The Kenyan shilling was steady on Monday and traders said foreign investor inflows for a Treasury bond on sale this week could offer support for the currency amid ample liquidity.
At 0654 GMT, commercial banks quoted the shilling at 86.40/50 to the dollar, unchanged from Friday's close.
"There seems to be a little bit of mid-month dollar demand from corporates that we expect, so this will put some pressure on the shilling," said Nahashon Mungai, trader at Kenya Commercial Bank.
"There is a lot of liquidity in the market. Overnight rates have actually dropped to below 5 percent now," he added.
The weighted average interbank lending rate fell to 4.9708 percent on Friday from 5.0438 percent a day before..
Excess shilling liquidity makes it relatively cheaper to hold onto long dollar positions.
Traders said the sale of a two-year Treasury bond worth 15 billion shillings, due to be auctioned on Wednesday, had attracted foreign investors, and could offer some support.
"We anticipate the shilling to remain supported as foreign inflows trickle in for the two-year T-bond and as corporates pay up their tax obligations this week," Commercial Bank of Africa said in its daily market report.