The Kenyan shilling was flat on Monday and dealers said central bank dollar demand could keep the local unit from breaking the 76.10 level in coming days. The commercial banks traded the unit at 76.20/30 per dollar, from last week's close of 76.25/35. "The market is rangebound today," said Neha Radia, corporate dealer at Standard Chartered Bank.
"There are no strong fundamentals to warrant the currency pair to run away and therefore we expect the pair to remain trapped within the 76.00-76.80 range." The Kenyan currency traded in a tight range last week, well supported by dollar inflows from agricultural exporters and non-governmental organisations, which were easily absorbed by importer demand and central bank greenback purchases.
There have also been dollar receipts by investors looking to buy Kenyan government bonds and shares at the Nairobi bourse in the last few weeks. "(Offshore) people are still looking for shillings. This is what has held up the shilling," said Sheikh Mehran, a dealer at Co-operative Bank, adding that the central bank might keep the local currency from gaining by buying on the dip. "That's what will keep the shilling from breaking 76.10."