Shilling steady, subdued demand seen helping

Kenya: The shilling firmed on Wednesday, with traders expecting more gains, helped by offshore investor flows to buy government bonds later in the day and subdued dollar demand as companies close down for theholidays. Commercial banks quoted the shilling at Sh90.40/60 to the dollar, compared with Tuesday’s close of Sh90.55/65.

The Central Bank is due to auction a new two-year Treasury bond and a re-opened 15-year bond worth a total Sh20 billion later on Wednesday. Traders said this was expected to give the shilling some support as foreign investors bring in dollars to buy the bonds.

 “It looks bullish today,” Peter Njuguna, head of asset liability management at Kenya Commercial Bank, said. “You know there is a bond auction today, so people are arguing that we could see just a bit of inflows going into the bonds and supporting the shilling,” he said.