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UPDATE 1-Kenyan shilling seen falling after c.bank rate cut
May 7, 2013 / 4:11 PM / 4 years ago

UPDATE 1-Kenyan shilling seen falling after c.bank rate cut

* Shilling seen falling towards 84.30 per dollar
    * Debt yields to fall in high demand
    * Uchumi leads shares higher

 (Adds markets close, stocks)
    By Kevin Mwanza
    NAIROBI, May 7 (Reuters) - The Kenyan shilling, steady on
Tuesday, is expected to weaken following the central bank's cut
in its key lending rate which was announced after markets
closed.
    The Central Bank of Kenya announced a 100 basis point cut to
8.50 percent in its benchmark interest rate, making
it cheaper to hold long dollar positions. 
    Earlier, at the 1300 GMT close, commercial banks quoted the
shilling at 83.80/84.00 per dollar, barely moved from
Monday's close of 83.90/84.00.
    "We might see a knee-jerk reaction tomorrow with the
shilling falling towards 84.30," said Ignatius Chicha, head of
markets at Citibank.
    A Reuters poll had shown the market was expecting the bank
to keep its main lending rate unchanged, citing an upside risk
to inflation due to higher food prices, but a handful of
analysts predicted a small cut. 
    In stocks, the benchmark index rose for the fifth
straight session, up 0.7 percent to 4,881.75 points, led by
retailer Uchumi.
    Uchumi jumped 6.1 percent to 21.75 shillings as it recovered
from a slump last week that saw its shares shed 15 percent of
their value.
    In the debt market, bonds worth 3.1 billion shillings were
traded, up from 1.8 billion shillings on Monday.
    Traders said they expected yields to fall in high demand at
coming sales as investors rush to lock in the current high
yields after the central bank's rate cut decision.
    "I think rates will come down," said Caleb Mutai, a fixed
income trader at Tsavo Securities. "There will be overwhelming
demand." 
    
    
               ...........................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:
                                    
               
 
 (Editing by Edmund Blair and Stephen Nisbet)

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