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

Electronic trading of the local currency was disrupted in the last two days after a major inland communication link was cut, affecting internet services providers countrywide.

At 0755 GMT, commercial banks quoted the shilling at 82.30/50 per dollar, barely changed from Tuesday’s close of 82.30/40, though actual trading levels were not clear due to the network breakdown.

“The dollar is strong across the board. A bit of that has fed into the shilling,” said Dickson Magecha, a trader at Standard Chartered.

Traders said the local currency was expected to continue enjoying support from offshore investors attracted by the relatively high yields in the country.

The average weighted yield Kenya’s on 182-day Treasury bill fell to 18.112 percent in an oversubscribed auction on Wednesday from 18.377 percent last week, while the central bank said it would sell 91-day bills on Thursday.

Ignatius Chicha, head of trading at Citibank, said there was a shilling liquidity crunch, forcing banks to trim their dollar positions to fund local currency needs.

The average interbank rate rose to 27.2 percent on Wednesday, the highest level since Dec 29 at 28.8 percent, and up from 26.8 percent the previous day.

(Reporting by Beatrice Gachenge; Editing by George Obulutsa and Toby Chopra)

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.