NAIROBI (Reuters) - The Kenyan shilling firmed against the dollar on Friday, helped by continued central bank selling of dollars to commercial banks and investors buying riskier assets after euro zone leaders struck a deal to contain the region's debt crisis.
At 0805 GMT, commercial banks quoted the shilling at 99.30/99.90 against the dollar, weaker than 98.90/99.30 where it traded earlier, but firmer than Thursday's close of 99.60/100.20.
Traders said spreads were wider than the usual 10 or 20 cents because of tight shilling liquidity in the market.
"It's strengthening because of the euro and positive sentiments from what central bank has been doing," said a trader at one commercial bank.
Kenya's central bank has been in the market mopping up shilling liquidity through repurchase agreements and selling dollars to commercial banks with a twin aim of tightening liquidity and boosting green back supply.
The bank is scheduled to hold its rate-setting meeting on November 1, and market players expect further tightening measures to fight high inflation and extreme volatility in the exchange rate.
Traders said the shilling lost some of its gains after some importers from the oil sector came in to buy dollars to take advantage of the recent gains and meet their end-month demand.
"End-month demand for dollars by oil importers has picked up after we crossed below 99 briefly this morning," said a trader at another commercial bank.
