NAIROBI: Kenya’s shilling was a touch stronger against the dollar on Tuesday, with the focus on the central bank which has been active in supporting the local currency. At 0900 GMT, commercial banks quoted the shilling at 103.80/104 to the dollar, slightly firmer on Monday’s close of 104.00./10.
One trader at a Nairobi-based commercial bank said the threat of further central bank interventions was putting a floor on the depreciation of the shilling, which has lost about 15 percent against the dollar this year. “The market is not too keen to take (the shilling) above 104,” said the trader, adding that strong liquidity was likely to weigh on the shilling again.
Kenya’s central bank regularly mops up excess liquidity and has in the past few months periodically intervened in the market to support the currency by selling dollars. The bank said on Tuesday it planned to mop up 14 billion shillings ($135 million) in excess liquidity from the money markets.
The shilling has been under pressure for most of this year from the dollar’s strength, Kenya’s high current account deficit and poor tourism inflows after a spate of attacks by Somalia al Shabaab insurgents.
