NAIROBI: Kenya's shilling held steady on Wednesday and traders said it was likely to firm against the dollar in the next few sessions due to an anticipated fall in corporate appetite for greenbacks.
By 0830 GMT, commercial banks posted the shilling at 86.80/87.00 per dollar, matching where it closed on Tuesday. The currency of east Africa's biggest economy has been trading in a tight band of 86.80-87.00 in recent days.
"However, going forward as the demand settles out of the market, we project that the shilling will recoup some of its losses and probably trade around the 86.50 to 86.80 range," said one senior trader with a leading commercial bank.
The central bank's rate-setting committee meets later on Wednesday. All 10 of the analysts polled by Reuters, before inflation figures were released at 0800 GMT, forecast rates would be kept at 8.5 percent .
Kenyan inflation inched higher to 6.41 percent in the year to April, but not enough to change rate forecasts, analysts said. Even so, traders said a surprise small cut would not impact the shilling.
"It's a demand-driven currency. Because the central bank continues to mop up excess liquidity, we don't foresee a case where a rate cut would impact the shilling negatively," said the senior trader.
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