Nairobi - The Kenyan shilling was firmer on Friday, helped by subdued corporate dollar demand and sales of the US currency by companies seeking to stockpile on the local currency to meet tax payments next week.
At 08h07 GMT, commercial banks quoted the shilling at 95.80/96.00 to the dollar, from 96.15/25 at Thursday's close.
“We have seen subdued demand. We have the fact that next week also corporates will be paying their taxes. So you find that now corporate demand might ease as they collect shillings to meet their tax obligations,” a senior trader at one commercial bank said.
The trader said after the tax payments, the shilling would be under pressure due to renewed dollar demand from importers.
The central bank said on Friday it planned to mop up 6 billion shillings ($63 million) from the money market through repurchase agreements and term auction deposits (TAD).
Mopping-up liquidity helps to support the shilling.
“With attractive rates of the TAD, I believe that should put pressure on funding (long dollar positions),” the trader said.
Traders forecast the shilling, which has lost 5.5 percent against the dollar so far this year, to trade in the 95.20 to 96.20 range against the US currency in the next few days.
Reuters