Kenyan shilling rallies to near 2013 high vs dollar

Thu Feb 28, 2013 3:30am EST

Related Topics

NAIROBI, Feb 28 (Reuters) - The Kenyan shilling 
rallied for a sixth day on Thursday, targeting its 2013 traded
high of 85.80 against the dollar, as commercial banks cut back
on long dollar positions, trader said.
    Early in the morning session the local currency breached the
86 level to trade at 85.90 before easing back slightly.
The shilling had gained more than 1 percent the previous day.
    The shilling has now rallied about 2 percent in the last six
sessions, wiping out nearly all the losses it had made this
year, as the market bets a closely contested presidential vote
next Monday will not result in widespread violence. 
    "Someone big might have seen a floor and decided to sell his
dollar holdings. That might have caught some guys flat-footed
and they decided to sell too," said a senior trader at one
commercial bank.
    At 0740 GMT commercial banks quoted the shilling at 86.10/30
per dollar, off an intraday high of 85.85/86.05 last touched on
Jan 2, but still a touch stronger than Wednesday's close of
86.20/30.
    Monday's presidential and legislative elections are the
first since President Mwai Kibaki's re-election in 2007, a win
that prompted opposition accusations of rigging and unleashed
weeks of inter-tribal fighting that killed more than 1,200
people.
    More violence cannot be ruled out this time around.
Front-runners Prime Minister Raila Odinga and former Finance
Minister Uhuru Kenyatta are neck-and-neck in the polls. If no
candidate wins an absolute majority, the vote will go to a
decisive run-off in April.
    Fear of unrest after these elections has seen some
businesses slow down their operations. 
    The central bank has been intervening to support the
shilling by mopping up excess liquidity from the money markets
on an almost daily basis, while occasionally selling dollars to
banks. 
    Market players said a smooth handover of power could boost
the shilling further, though gains could be checked as importers
 resume full operations after the vote.
    "Aggregate demand is lower right now since manufacturers are
not active," said Christopher Muiga, a senior trader at Kenya
Commercial Bank.
    On the Nairobi Securities Exchange, shares in sugar grower
and miller Mumias tumbled 15.2 percent to 4.20
shillings after it warned on Wednesday that its full-year
profits will fall more than 25 percent. 
    Two banks, Equity Bank and Co-operative Bank
, posted big profit jumps. Equity said its 36 percent
profit rise was above its own expectations. 
 
    Shares in Equity were up 0.9 percent to 28.25 shillings per
share after the announcement.
               ...........................Shilling spot rates 
                  .....................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 
              .............................Kenya Bond pricing 
             ..................Real time Africa economic data 
 <ECI & AFR> ...........................African economic news
          .................................NSE-20 Share Index
         .................................NSE All Share Index
             ...........................FT NSE Kenya 15 Index
             .......................... FT NSE Kenya 25 Index
  SPEED GUIDES:
                                    
            
 
 (Reporting by Kevin Mwanza; Editing by Richard Lough)
FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.