Kenya’s shilling strengthened on Wednesday, helped by foreign investors bringing in dollars to buy high-yielding government Treasury bills and bonds, and was expected to gain further in coming days, traders said.
Commercial banks quoted the shilling at 101.4555 to the dollar, compared with Tuesday’s close of101.6070.
“Right now, you have seen the government securities are giving good yields, so a lot of inflows have come in from foreign investors to pursue these yields,” a senior trader at one commercial bank said.
“So it’s supporting the shilling. But again, as we approach the end-month, we could see some slight (importer dollar) demand. But for now the sentiment for the shilling is quite positive.”
Yields on Treasury bills were all above 22 percent at last week’s sales, and investors are watching to see if they rise further this week. The higher rates attracted offshore investors.
A second trader at a second bank said as long as the rates stayed above 20 percent, the bias was for the shilling to gain more ground.
The shilling has lost 10.7 percent so far this year against the dollar.