NAIROBI, Nov 30 (Reuters) - The Kenyan shilling slipped on Wednesday as oil sector importers took advantage of a rally in the previous session to buy dollars, but traders there was support for the local currency as liquidity tightens due to high interest rates. The shilling, which is about 16 percent off an all-time low of 107 hit on Oct 11, firmed as much as 1.6 percent on Tuesday to touch a 21-weeks high of 89.00/10 aided by commercial banks trimming long dollar positions. At 0721 GMT on Wednesday, commercial banks quoted the shilling at 89.40/70 against the dollar, weaker than Tuesday's close of 89.25/45. "We are seeing some month-end dollar demand from the oil sector," said Bhavin Chandaria, a trader at Imperial Bank. "We don't expect the weakness to last as banks are still selling dollars. No one wants to hold dollars at these high rates." The return for holding shillings has soared, with the interbank rate at 30.3434 percent on Tuesday, after the central bank increased its benchmark lending rate to 16.5 percent from 7 percent over just two months. Investors lose out on that return if they hold onto dollars. Analysts and traders expect the central bank's rate-setting committee to maintain its hawkish stance when it meets on Dec.1 in order to check inflation, which rose for a 13th straight month to 19.72 percent in November. "With the inflation number rising to 19.72 percent, markets will keep an eye on the MPC meeting scheduled for this week for any signs of further tightening," said Bank of Africa in a daily report. "If the authorities increase the CBR (central bank rate) and ... increase CRR (cash reserve ratio) next month, the local unit could make further gains against the dollar this week." The Central Bank of Kenya said in its last policy decision it would raise the cash reserve ratio for banks by 50 basis points to 5.25 percent from Dec. 15. ...........................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...........................African economic news .................................NSE-20 Share Index .................................NSE All Share Index ...........................FT NSE Kenya 15 Index .......................... FT NSE Kenya 25 Index SPEED GUIDES: (Reporting by Kevin Mwanza; Editing by Yara Bayoumy)
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Wednesday 30 November 2011
Kenya shilling slips vs dollar, seen firming
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