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Kenyan Shilling Firms Slightly, Egypt Unrest May Hurt Tea Exports
16/08/2013
NAIROBI (Reuters) - The Kenyan shilling was slightly firmer on Friday as banks sold dollars ahead of the weekend, with traders saying the local currency could come under pressure if tea exports are hurt by civil unrest in Egypt.
By 0743 GMT, commercial banks quoted the shilling at 87.40/60 per dollar, stronger than Thursday's close of 87.50/60.
The currency recovered from a slide earlier in the week after the central bank boosted supply via reverse repurchase agreements on Monday and Tuesday.
"The shilling has gained because the central bank has not been coming in to inject liquidity with repos," said Wilson Mutai, a trader at Gulf Bank.
"But given the scenario in Egypt and it being the main importer of Kenyan tea, the shilling (could) ...weaken in coming days."
Tea is the east African country's biggest foreign exchange earner.
Traders said the shilling could also come under pressure over the next two weeks as importers buy dollars to settle end-of-month payments.
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