Shilling to stay under pressure barring Central Bank dollar sales

Kenya: Kenya’s shilling was steady at three-year lows on Tuesday and traders said the local currency was expected to hold within a range, barring any Central Bank dollar sales.

At the opening of trade, commercial banks quoted the shilling at 93.15/35 to the dollar - a level last in November 2011 - compared with 93.20/30 at Monday’s close.

Central Bank sold an unspecified amount of dollars to banks last Tuesday when the shilling fell to 92.82/92. “We might see some range-bound trading.

This is unless we see some intervention by Central Bank,” a senior trader at one commercial bank said. The Central Bank says it only intervenes to contain volatility but not to support any targeted exchange rate.

 Traders said barring any Central Bank action, the shilling was likely to stay under pressure in the days ahead thanks to slowing dollar inflows from tea and horticulture exports.