Monday, 31 August 2015 13:39
NAIROBI: The Kenyan shilling was steady against the dollar on Monday but expected to come under pressure from strong liquidity in the money markets.
At 0725 GMT commercial banks quoted the shilling at 103.80/104.00 to the dollar, barely changed from Friday’s close of 103.80/90.
“In the money market there is quite a bit of liquidity and we still keep getting customers who are interested in buying (dollars). I don’t see why the shilling would gain,” one Nairobi-based trader said.
The shilling has also come under pressure from global market turmoil, with foreign investors withdrawing funds from emerging markets.
However, traders said the shilling could receive some support from Kenya’s central bank, which regularly mops up excess liquidity and has in the past few months periodically intervened in the market to support the currency by selling dollars.
On Monday the bank said it planned to mop up 29 billion shillings ($ 279.1 million) in excess liquidity from the money market.
The shilling, down 15 percent against the dollar this year, has been under pressure from the dollar’s strength, Kenya’s high current account deficit and poor tourism inflows after a spate of attacks by Somalia al Shabaab insurgents.
