NAIROBI (Reuters) - The Kenyan shilling firmed against the dollar on Friday as banks sold the U.S. currency ahead of the weekend, and traders said the market was expecting the central bank to mop up liquidity with repurchase agreements.
The central bank has been in the market absorbing shillings through repurchase agreements, while selling unspecified amounts of dollars to commercial banks, with the twin aim of boosting dollar supply and draining shillings from the market.
At 0621 GMT, commercial banks quoted the shilling at 99.50/100.15 against the dollar, stronger than Wednesday's close of 100.10/40. Financial markets were closed on Thursday for a public holiday.
"Some major players (are) selling dollars. Mostly interbank," said a trader with one commercial bank.
Traders said they expected the shilling to trade in the 99.00-101.00 range against the dollar during the session as gains are checked by demand from importers after the shilling rallied from a record low of 107 hit on October 11.
"The shilling is expected to remain under pressure as end month demand begins to trickle in. Demand remains a threat to the shilling's recent bullish run," said Bank of Africa in a daily report.
