Shilling remains steady against dollar as traders shrug off president's court date

Kenya: The shilling held steady yesterday as traders shrugged off news that their President would become the first sitting world leader to appear in front of the International Criminal Court.

At the opening of trading, commercial banks quoted the shilling at 89.15/35 to the dollar, compared to Monday's close of 89.25/35.

"It's been flat, a tad stronger from yesterday's close. Doesn't seem to have much driving it right now. The flows have been more or less well-matched," Duncan Kinuthia, head of trading at Commercial Bank of Africa, said.

Traders said it would have hurt the shilling if President Uhuru Kenyatta had ignored orders to appear in front of the Hague-based court, where he faces charges of orchestrating ethnic killings after the contested 2007 election.

Kenyatta, who denies the charges, said on Monday he would go to the tribunal in a personal capacity. "I think the fact that he is going is status quo. The opposite of that is what maybe would have had an effect. But the fact that he is going does not ruffle the markets," Kinuthia said. Bank of Africa said now that the question of whether Kenyatta would attend was out of the way, it expected "the market fundamentals of demand and supply to determine the direction for the shilling".

Traders said they expected the shilling, which has lost 2.9 per cent against the dollar so far this year, to trade between 89.10 and 89.50 in coming days. The shilling has been under pressure from importer dollar demand and lower inflows from tourism and tea exports.

According to traders, there has been some dollar demand in the recent times from corporates, especially the telecommunications sector and inter-bank while inflows have been low.