kenyan shilling
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‘Chill’, Kenya central bank tells shilling speculators as election nears

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By Duncan Miriri

NAIROBI (Reuters) – Speculators against Kenya’s shilling in the run-up to national elections should “chill”, and a fall in its foreign exchange reserves is no cause for alarm, the head of its central bank said on Tuesday.

The bank’s hard currency reserves dropped to $7.80 billion – or 5.2 months of imports – last week, and traders said the central bank had sold dollars in the market at least twice since Thursday to support the local currency.

“We believe that our (reserves) cover is adequate,” Njoroge said, adding that some of the recent pressure on the shilling was due to bets on the outcome of the election, which takes place on Aug. 8.

“There is a lot of speculation out there… and frankly some of those speculators need to chill,” he told a news conference at the central bank.

Elections can be fraught and tense occasions in Kenya. The most recent one in 2013 passed relatively peacefully, but violence following the previous ballot in 2007 killed around 1,200 people.

At 10:10 GMT on Tuesday, the shilling was little changed at 103.80 per dollar.

Central bank currency reserves reached at record $8.27 billion at the end of May, central bank data showed. Given the drop since then, traders have expressed concerns about the bank’s ability to intervene further to support the shilling should the need arise.

The Kenyan currency has been broadly stable against the dollar this year and Njoroge said this trend should continue as inflation eased.

He said he expected annual inflation to drop into the government’s preferred band of 2.5-7.5 percent within two months as food prices continued to fall.

Headline inflation raced to a five-year high of 11.7 percent in May following a drought, but it fell to 9.21 percent last month after rains boosted supplies.

“We expect (inflation) to breach 7.5 (percent) within this quarter,” the central bank head said.

He linked the fall in currency reserves to government payments of just over half a billion dollars that were included in the budget.

Njoroge said concerns about the recent closures of at least 10 bank branches by Barclays Kenya and other lenders was “overblown,” saying technological innovations such as mobile phone banking were reducing the need for physical branches.

“We cannot just be stuck on brick and mortar,” he said.


(writing by John Stonestreet)


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Kenyan shilling inclined toward depreciation as oil demand weighs

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NAIROBI (Reuters) – The Kenyan shilling was broadly stable against the dollar on Monday, but some demand from oil and merchandise importers was seen giving the local currency a depreciation bias, traders said.

At 0757 GMT, commercial banks quoted the shilling 103.30/40 per dollar, compared with 103.25/45 at


(Reporting by John Ndiso; editing by Elias Biryabarema)


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Kenya shilling stable, seen facing pressure from importer demand

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NAIROBI (Reuters) – Kenya’s shilling was stable against the dollar on Monday but traders said they expected it to come under modest pressure during the week due to increased importer demand.

At 0728 GMT, commercial banks quoted the shilling at 102.20/30, the same as Friday’s close.

“Going into this week, we expect there will be some pressure on the shilling. The demand (for dollars) should pick up. Most corporate clients have come back to work,” a senior trader at one commercial bank said.

Typically demand for dollars comes from the energy sector, manufacturers and telecoms firms.




(Reporting by George Obulutsa)

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Kenya’s shilling steady, importers cautious about buying dollars

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NAIROBI (Reuters) – Kenya’s shilling was steady in early trading on Monday, with most importers holding off from dollar purchases to see if the currency would strengthen below the 102 level.

By 0715 GMT, the shilling was quoted at 102.05/25 to the dollar, little changed on Friday’s close of 102.10/102.20.

The shilling had strengthened below 102 last week before demand for dollars from energy importers made it weaken.

“Most other importers are waiting to see if the market will dip again below 102 before they come into the market,” one trader at a commercial bank said.

Investors were also acting cautiously before a rate decision on Wednesday by the U.S. Federal Reserve, when it could raise rates. “That (decision) will probably give the market direction,” the trader said.



(Writing by Edmund Blair)

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Kenyan shilling firm, offshore investors eye bond

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NAIROBI (Reuters) – Kenya’s shilling was steady in early trading on Monday, amid limited corporate appetite for dollars and helped by some foreign exchange inflows before a government bond auction.

By 0708 GMT, the shilling was quoted at 102.05/25 to the dollar, little changed on Friday’s close of 102.10/20.

The shilling has hovered in a range of roughly 102.00 to 102.50 since early November, after appreciating from September levels when it almost touched an all-time low of 106.80.

Traders noted some inflows of dollars ahead of the auction of a nine-year, government infrastructure bond on Dec. 9.

“We are still seeing some offshore interest,” said one trader at a commercial bank.

He said there was limited corporate demand for dollars, although he said that could pick up later in the week as energy firms seek foreign exchange to meet payment deadlines. However, he said the shilling was expected to hold its recent range.


(Writing by Edmund Blair)

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Kenyan shilling falls on importer demand, stocks in up

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NAIROBI (Reuters) – Kenya’s shilling gave up gains made earlier in the day due to importer dollar demand after the central bank sold the U.S. currency, while stocks inched higher.

At close of trade at 1330 GMT, commercial banks quoted the shilling at 102.35/45 to the dollar compared with Thursday’s close of 102.25/35.

“There was slight weakening towards the end of the day. Demand is still there in the market. The shilling has been capped by the central bank (dollar) sales,” a senior trader at one commercial bank said.

“Going into next week we should see more (importer) demand coming in. Government security yields are coming down. That would put pressure on the shilling, and just be supported by the CBK sales.”

The trader said dollar demand would be from sectors such as energy and manufacturing.

Traders said the central bank sold foreign exchange early on Friday, giving the shilling support after yields on the 91-day Treasury bill fell below 10 percent at auction, making it less attractive to offshore investors.

The shilling touched an intraday high of 102.10/30.

The central bank does not normally comment on interventions.

The jump in yields on T-bills of various tenors last month to above 20 percent had attracted offshore dollar inflows, helping reverse some of the recent weakness in the currency.

Dealers said the fall in yields could now start putting more pressure back on the shilling, which in September had almost touched its 2011 all-time low of 106.80.

The currency has been under pressure from a range of factors such global dollar strength and Kenya’s widening trade gap.

On the Nairobi Securities Exchange, the main NSE-20 Share Index was up 1.01 points to close at 3,917.64 points.

On the secondary market, government bonds valued at 2.22 billion shillings were traded, down from 2.58 billion shillings on Thursday.


(Reporting by George Obulutsa and Edmund Blair; editing by Richard Balmforth, Reuters)

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Kenyan shilling strengthens ahead of bond auction

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NAIROBI (Reuters) – The Kenyan shilling strengthened on Monday, with the local currency supported by dollar inflows to be used for purchase of Kenya’s high-yielding government debt.

At 0715 GMT, commercial banks posted the shilling at 102.25/35 to the dollar, from Friday’s close of 102.40/102.50.

The currency, down about 14 percent against the dollar this year, was receiving support from inflows ahead of an Oct. 21 auction of an amortized one-year Treasury bond, and more broadly from its weekly Treasury bills auctions, said a trader at one Nairobi-based commercial bank.

“We have seen dollar inflows from foreign buyers coming in for the bond,” the trader said. “And, later in the week, as long as the T-bills continue to be this high, the shilling will continue to gain.”

In recent weeks traders have reported growing dollar inflows from foreign investors who have been attracted by interest rates on government Treasury bills of more than 20 percent, far above what Kenya usually pays for short-term debt.

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