News

The Kenya shilling lost ground against the dollar on Friday last week, hurt by loosening liquidity in the money markets.
At 11.00 a.m. commercial banks quoted the shilling at 102.25/102.35 to the dollar, slightly weaker on Thursday’s close of 102.15/25.
One Nairobi-based trader said the shilling slipped due to loosening liquidity following heavily subscribed government debt auctions where most of the bids were rejected.


“The Treasury has not accepted the bids for the Treasury bills and that money has come back into the market,” said the trader.
The shilling, down about 13 per cent against the dollar this year, had firmed in recent weeks due to inflows of dollars from off-shore investors buying short-term government debt that yielded in excess of 20 per cent.
But in auctions held on Wednesday and Thursday, the government rejected about Shs.106 billion worth of bids and accepted bids totaling Kshs.21 billion for the 91-, 182-, and 364 – day Treasury bills.  The yields on all paper plummeted at latest auctions.
In a sign of increasing liquidity in the money markets, the weighted average interbank lending rate fell to 9.3 per cent on Thursday from 10.2 per cent a day earlier.  The rate was about 15.1 per cent two weeks ago.
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