NAIROBI: The Kenyan shilling firmed against the dollar on Wednesday helped by off-shore selling of the U.S. currency and traders said the shilling was still under pressure from the energy and food sectors.
At 0709 GMT, commercial banks quoted the shilling at 89.20/30 against the dollar -- after touching a high of 89.00/10 earlier-- stronger than its Tuesday close of 89.35/45. "The shilling has been boosted by off-shores selling dollars in early trade. We are likely to see some corporate demand push it lower though," said Dickson Magecha, a senior trader at Standard Chartered Bank.
Traders said they expected the shilling to trade in the 88.50-89.50 range against the dollar in the days ahead, after it hit an all-time low of 89.80/90 on Monday.
"The energy sector, the looming food importation and huge corporate transactions could continue undermining the shilling," said Bank of Africa in a daily report.
"However, the shilling could get a reprieve on the back of rising interest rates."
The average yield on the 91-day Treasury bill rose to 9.016 percent at auction last week, while 182-day paper surged to 9.949 percent from 5.444 percent previously.
High bond yields are expected to attract foreign investors, which could help the shilling strengthen.
The 14-day and 50-day simple moving averages show the shilling under pressure in the near term.
