In Kenya Shilling strengthens ahead of bond auction

The currency, down about 14 percent against the dollar this year, was receiving support from inflows ahead of an Oct. 21 auction of an amortized one-year Treasury bond

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A fuel attendant handles Kenyan shilling notes at a petrol station in the capital Nairobi March 15, 2011. REUTERS/Noor Khamis play A fuel attendant handles Kenyan shilling notes at a petrol station in the capital Nairobi March 15, 2011. REUTERS/Noor Khamis
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The Kenyan shilling strengthened on Monday, with the local currency supported by dollar inflows to be used for purchase of Kenya's high-yielding government debt.

At 0715 GMT, commercial banks posted the shilling at 102.25/35 to the dollar, from Friday's close of 102.40/102.50.

A currency dealer counts Kenya shillings at a money exchange counter in Nairobi October 23, 2008. REUTERS/Antony Njuguna play A currency dealer counts Kenya shillings at a money exchange counter in Nairobi October 23, 2008. REUTERS/Antony Njuguna

 

The currency, down about 14 percent against the dollar this year, was receiving support from inflows ahead of an Oct. 21 auction of an amortized one-year Treasury bond, and more broadly from its weekly Treasury bills auctions, said a trader at one Nairobi-based commercial bank.

READ: Shilling weakens as manufacturers buy dollars

"We have seen dollar inflows from foreign buyers coming in for the bond," the trader said. "And, later in the week, as long as the T-bills continue to be this high, the shilling will continue to gain."

In recent weeks traders have reported growing dollar inflows from foreign investors who have been attracted by interest rates on government Treasury bills of more than 20 percent, far above what Kenya usually pays for short-term debt.

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