NAIROBI: The Kenyan shilling was steady on Thursday, and traders said it was likely to remain capped within a range although excess liquidity, if it remained, could exert downward pressure on the currency.
At 0803 GMT, commercial banks quoted the shilling at 86.40/50 per dollar, unchanged from Wednesday's close.
Traders said if the central bank (CBK) mopped up excess liquidity, as it has done since last week, making it expensive to hold long dollar positions, the shilling would strengthen.
"Demand and supply are well-matched, but excess liquidity is keeping the shilling on the back foot," said Sheikh Mehran, senior trader at Kenya Commercial Bank.
"I think they (central bank) could be coming in again to mop up."
On Wednesday the central bank was in the market and mopped up 6.1 billion shillings ($70 million) at a weighted average rate of 6.276 percent. It had sought to mop up 10 billion shillings, central bank data showed.
The shilling, which has gained 0.35 percent versus the dollar so far this year, is expected to trade in the 86.20 to 86.60 range in coming days, traders said.
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