Shilling steady against US dollar

The shilling was steady against the dollar, as greenback inflows from aid agencies were matched by interbank demand and traders said they expected the local currency to firm by the end of session.

In early trade Friday, commercial banks quoted the shilling at Sh92.40/60 against the dollar, unchanged from Thursday’s close. "We’ve seen a bit of dollar supply from the non-governmental organisations but they are evenly matched with interbank demand. There is not much interest at the moment," said Duncan Kinuthia, head of trading at Commercial Bank of Africa.

Some traders expected the shilling to break through the Sh92.00 shilling resistance level, helped by banks cutting long greenback positions in the face of a shilling liquidity crunch and importers holding back dollars orders.

"As we move higher, importers prefer to stay out, expecting a cheaper dollar," said Kinuthia.

The shilling has firmed 13.6 per cent from its all-time low of 107 hit on October 11, after the Central Bank raised its key lending rate sharply to 16.5 per cent on November 1, to fight inflation and exchange rate volatility.

- Reuters