Shilling stable thanks to dollar inflows

The shilling was stable against the dollar yesterday, supported by foreign investment flowing into the local debt market.

In early trade, banks posted the shilling at Sh102.10/30 to the dollar, little changed from Wednesday’s close of Sh102.00/10. “We’ve seen huge interest in the government securities from offshore investors,” said a trader at one Nairobi-based commercial bank.

In recent weeks traders have reported growing dollar inflows attracted by interest rates on government Treasury bills of more than 20 per cent, far above what Kenya usually pays for short-term debt. At the weekly Treasury bill auction on Wednesday, the yield on the 364-day bill jumped to 22.363 per cent from 21.882 per cent a week ago, while that on the six-month bill jumped to 22.291 per cent from 21.840 per cent.