Kenyan shilling firms against dollar

The Kenyan shilling firmed against the dollar on Friday after the greenback lost ground against major hard currencies, increasing investors' appetite for riskier assets.

At the start of trade at 0600 GMT, banks quoted the shilling at 80.70/80 from Thursday's close of 80.85/95.

A strong euro and pound after the release of positive fundamental data yesterday has stabilised interest rates in the eurozone and increased appetite for riskier currencies, said Vimal Chudasama, senior trader at Chase Bank.

This typically means there is higher demand for the euro and the pound, translating to a globally weak dollar.

Currently the major world currencies affect the shilling since we have increased international currencies trading largely driven by fund managers and big banks, he said.

Kenya has attracted increased interest among fund managers looking to diversify their portfolios in frontier markets such as the biggest economy in east Africa, pegged on the prospects for economic growth. ID:nLDE6BG067]

Traders are watching Kenya's central bank, which has been buying hard currencies to increase its reserves but has so far stayed out of the foreign exchange market this year.

The central bank is at the back of every traders' mind. They (CBK) could move in now that we are below 81 rate, said Chris Muiga senior trader at Kenya Commercial Bank.

Traders expect the shilling to trade at the 80.70/81.00 range on Friday.