Dollar inflows support shilling exchange rate

The shilling was steady against the dollar with traders seeing light support for the local currency from inflows trickling in for a one-year Treasury bond auctioned on Tuesday.

Foreign and local investors have until Monday to settle payment for the bond whose auction yield fell to 16.43 per cent under heavy demand.

Typical end-month demand for dollars from importers is expected to weigh on the shilling.

In early trade Friday, commercial banks quoted the local currency at Sh83.00/20, barely changed from Thursday’s close of Sh83.05/25. "It is holding steady but biased to strengthen on offshore inflows," said Julius Kiriinya, a trader at African Banking Corporation.

Market players expect inflation to fall for a fourth straight month and that an easing in price pressures had been factored into the currency market.

— Reuters