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The Kenyan shilling extended its recent gains to a fresh seven-week high against the dollar on Thursday, helped by inflows from tea and horticulture exports and traders expected the local currency to keep strengthening.

The shilling has come off its all-time low of 107 to the dollar touched in October, helped by dollar sales from exporters in the horticulture, tea and tourism sectors.

Traders were betting on more inflows from the tourism and non-governmental organisations during the session, which would help support the shilling, they said.

At 12:00 SA time, commercial banks quoted the shilling at 95.00/20 to the dollar, up from 95.80/96.10 during market opening and 0.73 percent stronger than Wednesday's close of 95.70/90.

“We have had supply from the tea and horticulture sector coupled by tight liquidity,” said Sameer Ligadia, head of trading at Diamond Trust Bank.

Interest rates in the money markets have been on a steady rise after the central bank's record 5.5 percentage point increase of its key lending rate to 16.5 percent last week, pushing the weighted average interbank rate to 29.4 percent on Wednesday.

“On the supply side, we expect forward (dollar) sales from exporters coming through and my expectation is the shilling will continue gaining,” said Raphael Owino, a trader at Commercial Bank of Africa.

In stocks, telecoms operator Safaricom tumbled 6.8 percent to 2.75 shillings ($0.029) each in early trade, after the company posted a 48 percent slide in first-half profit to 5.397 billion shillings. - Reuters