Kenyan shilling stable

The Kenya shilling traded in a range against the dollar on Tuesday with the market watching out for any central bank greenback sales, dealers said. The banks quoted the local unit at 72.80/90, barely changed from Monday's 72.70/80 close. The central bank auctioned dollars in two consecutive sessions last week after the shilling tumbled to an 8-month low.
"We predict a weaker shilling in the days to come but this will depend on whether there is intervention by the central bank or not," a market report by Bank of Africa said. "If the authorities keep off then the shilling could tumble further under pressure from importer demand. Authorities could help stem further losses by intervening to prop up the local unit." Governor Njuguna Ndung'u said on Monday the central bank would intervene only to stabilise the local currency, not to give direction.
The shilling oscillated between 72.60 and 72.95 in Tuesday's morning trade. Chris Rwengo, head of trading at Standard Chartered Bank, said he thought the narrow range did not warrant any central bank participation but said further depreciation in the local currency would fuel inflation.