RTRS:Kenyan shilling steady vs dollar, tea sector eyed
NAIROBI, July 26 (Reuters) - The Kenyan shilling was
steady against the dollar on Tuesday and traders said they
expected the local currency to come under pressure from
importers' demand for the dollar as the month comes to an end.
Dollar inflows from a tea auction due to be held later in
the east African country could boost the shilling. Tea is the
leading foreign exchange earner in Kenya, the world's biggest
exporter of black tea.
At 0733 GMT, the shilling was quoted at 90.35/55 against the
dollar, barely changed from Monday's close of 90.40/50.
"(The shilling) rallied early morning because of a stronger
euro globally, but I think oil companies have been buying
(the)dollar, so it's weak again," said Kennedy Butiko, deputy
head of treasury at Bank of Africa.
"Traditionally we see tea (dollar) inflows in the market
today that tend to support the shilling, but being the end of
month we don't see the shilling gaining much. The tea inflows
might be taken up by demand that is there."
Traders said they expected the shilling to trade within the
90.00-91.00 range against the dollar on Tuesday, but said it
could break through the psychological 91.00 level if importers
end-month demand for dollars persisted.
They said they expected the central bank to be back in the
market with reverse repos to try and add shillings to the market
after a tightening of liquidity due to investors purchasing of
bonds last week and taxes falling due at the end of the month.
The Central Bank of Kenya injected 19.9 billion shillings
($220.3 million) in reverse repos on Monday after injecting a
total of 18.89 billion shillings in two reverse repos last week.