Shilling slips but tea, bonds may support

The Kenyan shilling weakened Wednesday on energy sector demand for the US dollar, but traders said it would get support from inflows to the tea sector and from offshore investors buying Government bonds.

High yields on government securities have fuelled foreign demand, especially for short-dated papers, bringing in dollars and leading to high subscription rates.

The government will auction Sh10 billion of one-year bonds and Sh3 billion of 182-day. Commercial banks quoted the unit at Sh83.10/30 against the dollar, slightly weaker than Tuesday’s close of Sh82.95/15.

Traders said the shilling could trade in the Sh83.00-84.00 range during the week as the central bank stays out of the repo market. It will hold its next policy setting meeting March 6.

—Reuters