August 14, 2014 / 9:11 AM / 3 years ago

Kenyan shilling steady after dollar demand fizzles

3 Min Read

NAIROBI, Aug 14 (Reuters) - The Kenyan shilling was little changed on Thursday after dollar demand by companies fizzled and dollar inflows remained scant, but traders said the currency had a bias for easing.

At 0830 GMT, commercial banks quoted the shilling at 88.05/88.15 to the dollar from its closing level of 88.00/88.10 on Wednesday.

"Corporate demand has decreased and companies are not buying at these levels, which is keeping the shilling from sliding further," said Sheikh Mehran, head of trading at I&M Bank.

Demand for dollars by banks to cover their short dollar positions had also ebbed, he said.

Traders said dollar inflows from Kenya's weekly tea auction have been scant, due to over-production which has kept tea prices subdued for most of this year.

"There are some tea export inflows, but very small and they are being absorbed so having no impact on the shilling," said John Njenga, trader at Commercial Bank of Africa.

The shilling has weakened since Friday, when banks started buying the greenback after signs that a domestic funding crunch was easing. Overnight interbank borrowing rates had risen over the past two weeks, when the government delayed releasing funds to departments and local authorities.

The central bank injected funds into the market from Tuesday to Thursday last week to alleviate the crunch. .

Traders forecast the shilling was unlikely to break the 88.20 level against the dollar due to slack dollar buying.

...........................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 James Macharia; Editing by Janet Lawrence

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