NAIROBI (Reuters) - The Kenyan shilling gained against the dollar on Thursday, helped by agriculture sector dollar inflows, especially from tea exporters, and traders said they expected it to firm further on tight liquidity.
At 0639 GMT, commercial banks quoted the shilling at 93.20/50 against the dollar, stronger than the 93.60/90 it closed at on Wednesday.
Dollar/shilling "is lower today mainly on agriculture sector inflows and tight liquidity could see it edge much lower," said Wilson Mutai, a trader at African Banking Corporation.
Technical charts showed the dollar support level at 92, and trader said if it were to cross, it could trade below the psychological important 90 level.
Shilling liquidity in the market tightened after a sharp increase in the central bank's key interest rate to 16.5 percent on Nov 5, to support the ailing local currency and rein in rampant inflation.
The bank is set to hold its next Monetary Policy Committee meeting on December 2.
Traders said they also expected other dollar inflows to help the shilling firm towards the end of the year.
"With the year coming to a close soon we expect NGO (non-governmental organisation) inflows, diaspora repatriations and tourism and farm inflows to continue supporting the shilling," said Bank of Africa in a daily report for clients.
