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Kenya’s shilling holds steady against dollar for now

Kenya's shilling holds steady against dollar for nowNAIROBI: Kenya’s shilling was little changed against the dollar on Thursday, but was expected to come under pressure once the impact of the central bank intervention earlier in the week to support the currency fades.

At 0925 GMT, commercial banks quoted the shilling at 105.25/45, barely changed from Wednesday’s close of 105.25/35.

Kenya’s central bank intervened in the market on Monday and Tuesday, selling substantial quantities of dollars to boost the shilling as the local currency edged closer to its record low of 106.80, set in October 2011.

“It has been stable in that region for the last two days. But we expect it to face some pressure from tomorrow to next week once the flow dries up,” said one trader at a Nairobi-based commercial bank.

The shilling has come under pressure from a broad rally in the dollar, Kenya’s large current account deficit and weak foreign currency inflows from tourism after a number of attacks by Somalia’s al Shabaab insurgents.

Copyright Reuters, 2015

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