Kenyan shilling stuck in a tight range against the dollar

The Kenyan shilling was broadly stable on Thursday as improved liquidity in the money markets kept up the pressure, offsetting the impact of lower demand for dollars by importers.

At 0700 GMT, commercial banks posted the shilling at 103.15/25, barely changed from Wednesday’s closing rate of 103.25/35. “Liquidity is still putting pressure,” said a senior currency trader at a commercial bank, referring to lower overnight lending rates, which usually make it cheaper for banks to build up dollar positions. The weighted average interest rate for overnight borrowing for banks stood at 17.2604 percent on Tuesday from 18.1622 percent the previous day.

 Traders said there was lower demand for dollars, as importers waited to see how far the shilling will strengthen, but the impact of the sluggish demand was being curbed by easing the liquidity conditions.