October 7, 2011 / 8:34 AM / 8 years ago

Kenya shilling slides vs dlr, high yields to support

NAIROBI, Oct 7 (Reuters) - The Kenyan shilling slid
against the dollar on Friday, with traders on the look-out for
fresh radical steps by policymakers to support the currency
which has lost nearly a quarter of its value against the
greenback this year.	
    The shilling was weighed by importer demand for greenbacks,
but traders expected it to firm next week as rising yields on
government securities attract offshore investors.	
    The central bank unveiled a shock 4 percent key rate hike to
11 percent on Wednesday, and the market was also eyeing
recommendations by a high-level government team set up by Prime
Minister Raila Odinga to examine more ways to stem the
shilling's weakness.  	
    At 0803 GMT, commercial Banks quoted the local currency at
102.90/103.10 against the dollar, weaker than Thursday's close
of 102.30/60.	
    The shilling is trading off an all-time of 104.15 it hit in
late September.
 	
    "There is still a lot of uncertainty. The market is still
consolidating to see what more will come from central bank in
addition to the rate hike," said a senior trader with a leading
commercial bank.	
    "We're also waiting to see what the Prime Minister's
taskforce will come up with to support the shilling," he added.	
    The government, which has requested for an early
disbursement of an IMF credit facility to support its balance of
payments, said on Thursday it expected the shilling to
strengthen "very soon" and pledged not to let it slide
again. 	
    The government is also planning to issue a debut Eurobond
this fiscal year, bringing its issuance forward from the 2012/13
(July-June) fiscal year.	
    Traders said rising yield on government securities would
attract offshore investors injecting dollars into the market
that could help the shilling firm in coming days.	
    The yield on the 91-day Treasury bill rose to
14.836 percent at the auction on Thursday, the highest level it
has been this year. 	
    The central bank had offered bills worth 4 billion shillings
($39.2 million), and received bids worth 12.93 billion
shillings, a 323 percent subscription rate. It accepted bids
worth 12.65 billion shillings. 	
    "Rising yields have given some hope that the shilling's
weaknesses could come to a halt soon," said Bank of Africa in a
daily report to its clients.	
  ...........................Shilling spot rates 
 
 <0#KESF=>.....................Shilling forward rates 
 
   .......................Cross rates 
 
 ..................................Local contributors 
 
 .......................Central Bank of Kenya Index 
 
 .....................Kenyan Bonds contributor pages 
 
   ...............Treasury bill yields 
 
 ..................Central bank open market operations 
 
 .........................Horizontal repo transactions 
 
 , ................Daily interbank lending rate 
 
 <0#KETSYSTR=>.............................Kenya Bond pricing 
 
 ..................Real time Africa economic data 
 
 <ECI & AFR> ...........................African economic news 
 
 SPEED GUIDES:
    
 
	
 (Reporting by Kevin Mwanza; Editing by George Obulutsa)
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